Anywhere I go, when people learn that I am a franchise attorney, they ask me what are the “hot” franchises that prospective franchisees are considering. My answer is that there are certain categories of franchises that are “hot” right now, but it does not mean they are for every prospective franchisee.
In my opinion, the current hot franchises are the frozen yogurt franchises and the senior care franchises. I have seen an increase in prospective franchisees considering home-based franchises and service-oriented franchises rather than traditional franchises that are location-based. It is clear that these less expensive franchises are favored by prospective franchisees because credit is still limited. Obviously if a new franchisee does not need to spend the money to lease a location and then build-out that space to the requirements of the franchisor, it will mean a smaller investment. Many of my franchisee clients are using their retirement funds to finance all or some portion of their franchise investment. This method has a great deal of complexities and possible risks and should be handled only by the top providers of this service and only after the new franchisee has a clear understanding of what is involved.
Although the “hot” franchises are appealing to many prospective franchisees, as I have stated in prior posts, it is important that a prospective franchisee evaluate what is best for him or her and then have the proper legal guidance to ensure that he or she understands the opportunity and is placed in the best legal position.