Looking for the NEXT GREAT business concept?
Here's what is trending, the hottest industries, and the most affordable franchises
FRANCHISING IS A LOW-COST WAY TO EXPAND business operations for some established entrepreneurs, while many would-be entrepreneurs see franchising as an opportunity to work for themselves without the same level of vulnerability that's associated with starting a venture from scratch. The number of franchise businesses is steadily on the rise, and the industry is expanding faster than the rest of the economy. In fact, franchises are expected to add nearly 200,000 new jobs in 2014, according to an update to the International Franchise Association's Franchise Business Outlook. The IFA counts more than 825,000 franchise establishments that support nearly 18 million jobs in the U.S. and $2.1 trillion total in revenues.
Minorities have made inroads in franchising. Whereas they accounted for only 5% to 6% of total franchisees (and managers of company-owned units) in 2000, the consensus is that today minority representation in the industry is in excess of 15%, says Eric Stites, CEO and managing director of Franchise Business Review, an independent franchise market research firm in Portsmouth, New Hampshire. Still, African Americans make up just 4% of total franchisees. That is mostly due to a lack of awareness and access to capital. But a number of franchisors, such as Dunkin' Donuts, are taking steps to bring more black franchisees into their systems (see "Diversity in Franchising").
Opportunities are plentiful if you know where to look. On the following pages are black enterprise's best buys in franchising. We have identified the hottest industries, the top trends, and the most affordable franchises.
Tasty Franchise Concepts
Fans of the long-running hit NBC sitcom Seinfeld can recall one of its most memorable episodes, "The Soup Nazi," which made the line "no soup for you" a staple in pop culture. The 1995 television episode mocked specialty soup retailer A1 Yeganeh as a cranky and demanding cook with strict rules for ordering. Yeganeh and his Soup Kitchen International rose to national fame as a result even though he opened his first store in New York City in 1984. He began selling gourmet soups in more than 4,000 supermarkets and online shops, before offering franchises of The Original Soupman in 2005.
Now the brand is taking its show on the road with the help of retired NBA great Shaquille O'Neal, a partner and strategic adviser to the company. In a new joint partnership with O'Neal, Soupman Inc., parent company of The Original Soupman, will market SoupMobiles as food truck franchises. Helping O'Neal drive the SoupMobile franchising program is franchisee Marcus Crawford, co-founder and president of Amongst Elite L.L.C., formerly an account manager with The Original Soupman.
Food trucks are one of the culinary world's hottest new trends and a fast-growing franchise opportunity. The market is expected to generate $2.7 billion in revenue by 2017. The food truck business has boomed since the recession, providing customers with quality food at affordable prices and business owners with lower operation expenses. The soup market is also a winning food category with billions of dollars in grocery and restaurant sales.
"The combination of our brand's strength, the food truck trend, and the fact that this is a low-cost franchise business should make the SoupMobile a one-of-a-kind franchise opportunity, which is what drew Shaquille and I to the business," explains Crawford. It cost $15,000 for the initial franchise fee, $115,000 for a SoupMobile truck, and about $60,000 for a cart/trailer. Total investment came to around $190,000.
"New Yorkers and tourists have embraced this brand of soup as one of the best tasting in the world even before the Seinfeld episode," he adds. "The brand is working to bridge the gap with people who are unfamiliar with the popularization of the product. So, why not take our dynamic product, put it on a food truck, and start reaching a bigger base?"
The first SoupMobile launched in New Jersey with plans for serving students of Rutgers University as well as foodies in Jersey City. It features about six types of soup from more than 40 Soupman brands, including Lobster Bisque, Chicken Gumbo, and the Seinfeld classic, Jambalaya. The soups are put on rotation depending on customer demand and personal choice. The truck also offers a sandwich, Al's Famous Lobster Roll, which Crawford notes is a big hit with customers.
"Soupman soups are bold and spicy. My family and friends love the soups," says O'Neal. "I think this product will do well in the African American community. We have great feedback from our customers and strong sales in Newark, New Jersey." There's also a popular pilot program at the Malcolm X Shabazz High School to serve soup and other lunch items.
Crawford has been taking his SoupMobile truck to venues across the country over the last year to gauge the market. On average, he notes, you can bring in as much as $2,000 daily.
The plan is to roll out 100 SoupMobile trucks over the next five years to be located in various states throughout the country. The Original Soupman has partnered with franchise development company The Atlanta Franchise Group on multiple fronts, including franchise sales, operations, training, and implementation.
Crawford says that a SoupMobile is simple to maintain, with a limited number of employees and no rent. As with any mobile food business, some of the disadvantages include bad weather, licensing and fees for parking, health inspection requirements, and truck maintenance.
SoupMobile franchisees will receive three weeks of classroom training with manuals on food safety and a written test. "After that," says Crawford, "all they'll need is to fill the cups right and treat the customers with respect."
WORK FROM HOME
Home-based franchise opportunities exist in various sectors and in a wide range...