Retail is huge. Franchising is huge. And, of course, holiday shopping is huge. Add all that up, and opportunities for retail franchises are tremendous--especially in the last four to six weeks of the year. A quick look at some numbers backs this up:
Worldwide, total retail sales grew from $6.37 trillion to $8.69 trillion from 2001 to 2005, a gain of 36.5 percent; for North America, those corresponding numbers rose from $2.10 billion to $2.58 billion in that same period, a gain of 23 percent. (Euromonitor International)
Inside the U.S., franchises accounts for more than $1.5 trillion in total economic output of in the U.S., nearly 10 percent of the country's total private-sector economic output. (PricewaterhouseCoopers, 2004)
American consumers will spend about $457 billion in the 2006 holiday shopping season, up 5 percent from 2005 (University of Dayton). That translates to about $800 per American--with an additional $100 in spending on themselves. (BIGresearch/National Retail Federation)
Each autumn, it's hard not to notice that holiday advertising begins earlier each year (try Halloween). It's late November, though, the day after Thanksgiving, when the holiday sales season "officially" kicks off. On this day, "Black Friday," stores are opening earlier too. When some retailers opened their doors at 5 a.m., others had already been open for hours. The taste of turkey still lingered as shoppers lined up to grab midnight bargains.
Yet while shoppers eagerly anticipate holiday sales, retailers view this time of year with mixed feelings. For some retailers, fourth-quarter sales account for 30 to 50 percent of their total annual revenues, and this can be a make-or-break season for them. Come January, some will be counting their profits, while others will have going-out-of-business sales.
Franchising is a proven way for retailers to minimize their risk. Backed by a proven system and a known brand, retailers can rest a little easier during this stressful time--knowing they have the support of their franchisor wanting them to succeed.
Franchised brands are in the thick of things each holiday season. While brands like Batteries Plus, for example, are eager to piggyback on the seasonal spike in electronic product sales, brands selling any item with gift potential do especially well this time of year.
Many shoppers will send holiday cheer to offices or homes from brands such as Edible Arrangements, (fruit baskets) KaBloom (flowers), or Schakolad Chocolate Factory. Coffee is another popular gift, whether from Starbucks, Dunkin' Donuts, or any one of dozens of local and regional coffee franchises. For more specialized gift-giving, holiday shoppers can try HobbyTown USA; for nature lovers, it's Wild Birds Unlimited or Wild Bird Centers of America.
Meanwhile, fast-food brands from Subway to Sbarro are happy to feed the throng of shoppers in America's malls, while Burger King, McDonald's, Wendy's, and other drive-thrus compete to sell them burgers and shakes as they travel from one shopping destination to the next. And sit-down restaurants from Applebee's to On the Border provide refuge for shoppers in between their rush to the registers.
A company like the Retail Brand Group, with 9 brands and more than 400 locations, offers potential franchisees six food concept opportunities to feed hungry shoppers and travelers (Pandini's, Salsa Rico, Sky Ranch Grill, Sub Connection, Pete's Arena, and Jazzman's Café).
To help shoppers work it all off and look good for the holidays, health and fitness brands offer year-end specials... followed by first-quarter deals to help post-holiday Americans shed the pounds they gained anyway and prepare for summer. That's also the time tanning parlors promote the value of a wintertime tan for health and beauty, and when tax service franchise owners dust off their books and download new software for the upcoming season.
No matter which retail segment (or segments) you choose, franchise opportunities are ample not only during the busy holiday season, but year-round.
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