The franchise forecast for 2013 is ‘partly cloudy’. The US Census Bureau, in its first comprehensive statistical report on franchise businesses, issued in 2010, stated that franchises comprise a very respectable 10.5% of businesses surveyed and were responsible for a disproportionately high figure of close to one sixth of total sales. However, the 2013 franchise growth rate, predicted by IHS Global Insight, is expected to reach 1.4% (lower than 2012’s 1.5%).

If you are considering investment in a franchise, it pays to do your homework. Honest self-assessment, combined with careful study of the current franchise climate, is essential to forecasting your personal success in the marketplace.

Positive Pointers

There are three main factors that point the way to success in franchise investment: affordable rates for small business bank loans, easy availability of commercial space in most areas, aggressive wooing of investors by franchisors, including fee discounting. If the ground is fertile, then it’s time to assess your franchise dreams.

What Works

Look at the 10 most successful American franchise businesses – Hampton Hotels, Subway, Jiffy Lube International Inc., 7-Eleven Inc., Supercuts, Anytime Fitness, Servpro, Denny’s Inc., McDonald’s and Pizza Hut Inc. See how they function, what level of investment they demand and whether joining their team would be a comfortable fit for you.

What’s Strong

Strong franchise industries in 2012 were food, fitness, eldercare and child related services. These are continuing to maintain a strong presence in 2013.

What’s Hot

Providing products and services for mobile computing devices – smartphones, tablets and their ilk – heads the list of cutting edge businesses right now. Franchises that can provide this technology are hot, smoking hot.

Learning technology is also hot. Online tutoring services, which are more cost efficient and flexible than the traditional model, are a new field with potential.

Disaster clean-up, such as water damage restoration services, is big as are mobile trucks for services ranging from car detailing to pet grooming, following the food truck gravy train, show signs of taking off.

What’s Not

There have unfortunately been some spectacular failures in the franchise field lately. The worst performing group in 2012 was Golf Etc., with a failure rate among its franchisees of 71.08%. Ouch! Study the worst performers as well as the best so you will have an idea of what to stay away from.

Know Yourself

Inventory your financial assets. Know exactly how much of an investment is required of you, as well as the expected rate of return. Make sure that your sources of liquid assets are in place. Keep a prudent reserve to live on and cover emergencies for at least six months while you get the business off the ground.


Just as important is taking stock of your character. An excellent prognosticator of successful franchise management is the ability, quite simply, to manage. Unlike many small businesspeople who started their enterprise because they love the field, as a franchisee you do not, “necessarily have to be passionate about what your business does … but you have to be passionate about running a business and following a franchise model,” explains Franchise Business Review in its Spring 2013 issue.

Good Luck

After doing your homework and coming up with accurate and detailed information, you will be in a position to make a clearheaded, honest decision. This will be a major factor in determining your personal franchise forecast.