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Relating to portfolio diversification, like most meals franchisees, I’ve historically turned to the holy trinity of restaurant franchise investments: burgers, hen, and pizza. Additional diversification meant leaning into sandwich, dessert chains or different rising segments inside foodservice, like after we grew the most important halal Center Japanese chain, The Halal Guys.
However with the foremost headwinds dealing with the restaurant trade at present, meals franchisees searching for generational wealth face a conundrum. The prices related to opening and working a restaurant today are astronomical — getting more durable. Every little thing is dearer: gear, wages, elements, lease. But, even with wages at an all-time excessive, eating places are struggling to rent and retain workers.
That is why entrepreneurs like me are beginning to additionally put money into non-food classes that value much less to launch, require far fewer workers and, most significantly, supply a higher return on funding.
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Venturing into non-food franchises
To be clear, I am not giving up on meals. I’ve spent 30 years turning manufacturers like 5 Guys, QDOBA, and The Halal Guys into nationwide gamers. As an early franchise accomplice in 5 Guys, we made tens of millions by rising and promoting our franchises. It is a nice enterprise. It lastly dawned on me although, that diversifying outdoors of meals is likely to be a good suggestion.
At Fransmart, we’re in enterprise to assist individuals get rich by way of franchising. My ardour — and fiduciary accountability — is to develop the stability sheet as massive as I can. Conventional manufacturers are usually not reducing it today, with once-thriving ideas like Rubio’s and Pink Lobster not too long ago submitting for chapter.
Greg Flynn, the world’s largest restaurant franchisee, not too long ago rebranded his firm after changing into a Planet Health franchisee — Flynn Restaurant Group is now the Flynn Group LP. Flynn believes Planet Health will likely be a terrific development channel for his firm because it requires fewer workers than eating places.
“It is much less intense,” he informed me after I interviewed him in April on my “Good Franchising with Fransmart” podcast.
Discovering GLO30
As I counsel purchasers to enterprise outdoors of meals, I am additionally placing pores and skin within the sport. For the primary time since I grew to become a 5 Guys franchisee accomplice 15 years in the past, I’m now a GLO30 franchisee accomplice.
The Washington, D.C.-based GLO30, based by Dr. Arleen Okay. Lamba, is a skincare studio that bridges the hole between facial spas and medical spas. It provides medically backed facials that mix medical science with custom-made, seasonally tailored, AI-assisted therapies, together with pharmacy energy at-home skincare.
A proprietary AI-based system named GLOria scans every visitor’s face on arrival and creates a customized remedy for the aesthetician to carry out. Proprietary upkeep merchandise are offered on-site as properly. Its core income stream is tied to the corporate’s subscription mode. Members return each 30 days for a remedy that seemingly will fluctuate each time, thus making a dependable income stream. The purchasers construct relationships with their service suppliers — greater than 65% of GLO30’s unique membership teams are nonetheless a part of this system.
Right now, Fransmart is working with Dr. Lamba and her staff to assist them obtain a aim of rising GLO30 to 1,000 areas in 10 years.
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Involved about working a non-food enterprise?
I did not know a lot about skincare, however I do learn about analysis and market tendencies. Well being and self-care is among the fastest-growing retail segments within the U.S. Already a $1.5 trillion international market, it stays extremely fragmented. Regardless of this, it has turn out to be a sought-after tenant for Predominant Streets and purchasing facilities, as landlords cater to customers’ well being and wellness wants. Companies like facials can’t be supplied on-line, which is why companies equivalent to Therapeutic massage Envy and Membership Pilates have grown quickly.
And I learn about ROI. GLO30’s unbelievable ROI cannot be discovered within the restaurant trade.
As for studying the enterprise, I am in the identical place as each different franchisee. I needn’t know the chemical substances or easy methods to function the gear. I am going to rent the correct managers, discover the correct areas, observe the playbook, and reinvest my earnings into new shops. So, in case your aim is monetary independence, and to build up wealth by investing in a franchise, it is time to think about your choices outdoors of meals.
Blitzscaling for fulfillment
My GLO30 companions and I are utilizing a distinct investing technique known as blitzscaling. As a substitute of opening a number of shops without delay, we open one retailer at a time and use the earnings to purchase extra GLO30s. It includes reinvesting earnings into extra shops, compounding returns. They hold investing till the shops can self-fund, permitting us to take earnings or promote.
In distinction, eating places sometimes take longer to succeed in that time with steady reinvestment. Non-food franchises like GLO30 supply larger returns. So, whereas I am going to at all times be captivated with meals franchises, Fransmart is paving the best way for entrepreneurs to earn generational wealth by investing in rising retail manufacturers which can be on the point of exponential development.
We’re proving it may be executed, whereas having a bit little bit of enjoyable alongside the best way.
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