Current Trends in the U.S. Franchising Market Stuart Schaag, U.S. Commercial Service U.S. Embassy in Prague November 9, 2012

Franchising in the U.S. Between 60% – 80% of all new jobs created in the U.S. come from small businesses. Annually, 35% of small businesses in the U.S. fail. The failure rate for franchises is less than 5%. Franchising is more likely to thrive during economic declines.

Shifting Demographics Millennials – potent economic force (more than 70 million) of media-savvy consumers raised on the Internet. Seniors – People are living longer, more active lives. Healthcare- related services, delivered at home or in assisted living facilities, will continue to grow. Home renovations for seniors, health and fitness programs tailored to aging bodies, and increased acceptance and use of "cosmeceuticals". Minorities – A "New Majority" as the ranks of Hispanics, African Americans, and Asians continue to grow. Majority of babies are now “minorities”. From food to fashion, real estate to business services, as members of these groups continue their rise in numbers and economic strength, their needs will continue to expand as well.

“Green” Businesses Energy-reduction services for both homes and the commercial sector will continue to expand. "Green" (LEED-certified) buildings, made with recycled materials and using less energy present opportunities for repair franchises. Sell recycled or biodegradable products. As the market matures more and more opportunities will appear.

Fitness, Health, and Personal Care Gyms, fitness centers, nutrition, recreation and sports, spas, tanning centers, and "healthy" fast food, provides targeted opportunities for each demographic group. Increase in childhood obesity has given rise to fitness centers and programs that combine fun and education for the younger set. Seniors have their own set of needs in these areas, fitness, health, and nutrition programs tailored to their age group.

Recession-proof Brands Franchises that do well, even when the economy does not: – hair cutting – tax preparation/accounting – shipping and packaging – child or pet care services – auto maintenance and repair, home repair and renovation Home-based franchises - low investment opportunities for self-motivated people. Used goods - including clothing, sports equipment, and electronic games also tend to do well in any economy.

Fast Food – Niche Brands New concepts that cannot compete against big players, but have dedicated following (ex. Five Guys Burgers and Fries). Mexican food franchises – ex. Qdoba Mexican Grill and Panchero’s Mexican Grill. Frozen yogurt - TCBY, SpoonMe, Yogen Fruz, Red Mango, and Pinkberry, too. Tasti D-Lite, which started in 1987, also seems to be getting back in the game.

U.S. Franchises Interested in Entering the Czech Market