For many industries in the United States, the franchise model has become a popular way for large chains to increase their store footprint with relatively low capital investment. While franchising is generally associated with foodservice industries, such as coffee store franchises or sandwich and sub store franchises, franchising models are used across a range of many different sectors. From senior care to early child education, many industries are capitalizing on opportunities to expand through franchising, which has resulted in significant growth. IBISWorld has identified several franchises in which growth is expected to outpace the rest over the five years to 2017.
The Massage Franchises industry includes franchised outlets that provide therapeutic and recreational massage services. The popularity of massage services has surged over the past five years as consumers increased their spending on luxury goods. Per capita disposable income is expected to increase at an annualized rate of 1.6% over the five years to 2017. Consequently, the improving economic environment and increasing visibility of massage franchises are expected to encourage strong, double-digit growth in the Massage Franchises industry during the five-year period.
Additionally, preference shifts toward healthier lifestyles have strongly benefited this industry. Consumers have increasingly recognized the health benefits of massages; according to the American Massage Therapy Association (AMTA), about 52.0% of adults who receive massages do so for health, medical or overall wellness reasons. Furthermore, as unemployment falls and more US consumers return to work, an increasing number of consumers have turned to massage therapists to relieve stress. This increase in demand for massage services has resulted in significant establishment growth. Over the five years to 2017, establishments are expected to increase at an annualized rate of 19.4% to reach 2,025 locations.
While the majority of massage therapists are sole proprietors, the popularity of massage franchises has increased over the past decade. Franchises benefit from efficient operating and support systems, along with increased advertising and name recognition power. Over the five years to 2017, industry revenue is expected to grow at an annualized rate of 22.9% to $1.4 billion, including growth of 21.5% in 2017 alone.
The Residential Senior Care Franchises industry provides residential and personal care services for elderly individuals who are unable to fully care for themselves. Franchises in this industry have boomed due to the aging of the US population and the growing need for dementia care among seniors with memory impairment. Demographic trends have largely underpinned growing demand for residential senior care franchises, with the number of adults aged 65 and older forecast to increase at an annualized rate of 3.1% to 47.3 million people over the five years to 2017. The average age of occupants residing in assisted living facilities, which include retirement and assisted living communities, is about 87 years old, according to the Assisted Living Federation of America. Since elderly individuals are generally more prone to injury and illness, they require more assistance with daily activities, driving their dependence on industry services. As a result, revenue for the Residential Senior Care Franchises industry is expected to increase at an annualized rate of 12.3% over the five years to 2017 to reach $3.6 billion.
The franchise model has gained traction within the industry as a way to capture demand for residential senior care from the aging population. Rather than building a reputation from the ground up, as nonfranchised businesses must do, franchise owners benefit from national marketing campaigns and the name recognition of emerging brands. Furthermore, as people live longer due to advancements in technology and medicine, the rapidly expanding senior population has continued to drive growth for industry operators. Moreover, demand for industry services has been driven by the growing need for dementia care. The prevalence of dementia, the blanket term for diseases and conditions characterized by a decline in memory or other cognitive skills, has been on the rise as the population ages. An estimated 5.2 million Americans have Alzheimer’s disease, the most common type of dementia, with 96.0% of cases occurring among adults aged 65 and older, according to the Alzheimer’s Association. This has resulted in a significant increase in the number of industry franchise establishments, which are anticipated to grow at an annualized rate of 8.9% to 2,234 locations over the five years to 2017.
The In-Home Senior Care Franchises industry provides in-home healthcare services to people aged 65 and older. The core services provided by franchises in this industry focus primarily on nonmedical, in-home care for seniors, such as meal preparation, help with bathing and dressing, personal care, transportation and companionship. However, some franchises also offer skilled medical care, including assistance with medications, wound care, physical therapy and other medical services. Although seniors are the primary market, the industry also provides services to disabled or chronically sick people who are recuperating from a hospital stay and anyone with a terminal illness who wishes to die at home. An aging population that is living longer and increasingly seeking to “age in place” continues to fuel growth for the In-Home Senior Care Franchises industry. An increase in this target demographic, which is expected to reach 47.3 million people by the end of 2017, has contributed to steady demand growth for in-home senior care services. Consequently, over the five years to 2017, industry revenue is expected to increase at an annualized rate of 10.4% to $9.7 billion.
Furthermore, a majority of seniors suffer from chronic health conditions, such as Alzheimer’s disease and dementia, with more than 5.0 million people in the United States and Canada being affected by these related ailments. Thus, as the senior population grows, demand for in-home senior care services will grow as well, bolstering industry expansion. Over the five years to 2017, the number of industry establishments is expected to grow at an annualized rate of 12.2% to reach 9,758 locations. Many of these franchises require a smaller initial investment than other industries, such as restaurants or health clubs, which has helped attract new entrants to the industry over the past five years. Additionally, there has been a growing trend among industry operators toward purchasing multiple locations; as a result, about 20.0% of franchise operators now own more than one establishment.
The Painting and Decorating Franchises industry is responsible for interior and exterior painting and wall coverings for both residential and nonresidential buildings, however the industry does not include interior design services. Due to a dramatic resurgence of construction activity, the industry has performed well over the past five years. The residential market, which accounts for an estimated 55.7% of industry revenue, has been especially supportive, with the value of residential construction expected to grow at an annualized rate of 6.6% during the five-year period. Similarly, the value of nonresidential construction, which accounts for about 30.0% of industry revenue, is expected to increase at an annualized rate of 2.2% during the same period. In addition, an uptick in residential renovations as well as growing corporate profit and consumer spending are further expected to benefit the industry. IBISWorld estimates that industry revenue will grow at an annualized rate of 6.5% to $1.3 billion over the five years to 2017.
Due to an ample supply of jobs available from both the residential and nonresidential construction markets as well as growing profit margins, industry franchises have expanded their locations in recent years. This has been especially true for the largest industry operators, which were able to weather less profitable conditions earlier in the period by simply closing unprofitable locations, rather than suspending total operations. As a result, the number of total establishments is expected to increase an annualized 2.5% over the five years to 2017 to reach 1,586 locations.
The Child Education and Developmental Center Franchises industry provides center-based care primarily for children under the age of six, with a focus on early education in areas including mathematics, literacy and language development to better prepare children for primary school. Despite greater competition from less expensive forms of child care, the Child Education and Developmental Center Franchises industry managed to post continuous growth over the five years to 2017. Steadily increasing child care costs coupled with an expanding target market managed to outweigh other factors that would typically result in a slowdown in revenue growth.
Over the past decade, there has been an increasing focus on the importance of early education, which has positively affected enrollment at industry franchises. Rising interest has been prompted by a slew of research studies promoting the importance of early education on long-term child development. Children with access to high-quality early childhood programs are more likely to earn higher test scores throughout their K-12 career, according to the Center for Research on Children. Furthermore, according to the latest information from the US Census Bureau, there are nearly 20.0 million children under the age of five in the United States and many of which require child care. Demand for industry operators has been fueled by the long-term shift in women’s workforce participation and support for early childhood development. Consequently, over the five years to 2017, the number of industry establishments is expected to grow at an annualized rate of 2.3% to reach 2,357 locations.