In today’s rapidly evolving franchise landscape, it is more crucial than ever for franchisees to consider diversifying their portfolios beyond the food industry. While food franchises have long been a cornerstone of the franchise world, increasing competition and economic volatility have made it essential for savvy investors to look at non-food opportunities as a means of mitigating risk and securing long-term growth.
Franchisees who diversify their income streams beyond food are better positioned to weather economic ups and downs, making diversification a smart strategy for ensuring sustained growth and resilience.
Consider the example of Greg Flynn, the largest food franchisee in the world, who recently expanded his portfolio by investing in Planet Fitness. In an interview on the Smart Franchising with Fransmart podcast earlier this year, Flynn noted that his move into the fitness sector has been ‘less intense,’ highlighting the benefits of venturing into the fitness industry.
Spotlight on Emerging Non-Food Franchises
Fransmart, a company primarily known for growing emerging food brands—most notably Five Guys, QDOBA, and The Halal Guys—has recently made headlines by adding non-food brands to its portfolio. This move is a significant shift for Fransmart and serves as a testament to the growing trend of franchisees diversifying beyond food.
PayMore is a trailblazing brand in the second-hand electronics market, a sleeping giant with $1.2 trillion worth of unused tech sitting in homes. With 65% of adults holding onto unused devices worth $2,000 on average, PayMore’s buy, sell, and trade model offers a convenient way to turn idle tech into cash. This approach has fueled a franchise network that has surpassed 500 units, attracting franchisees from top brands like Subway, Firehouse Subs, Domino’s, Little Caesar’s, and more. With 70% of operations online, PayMore franchisees make money around the clock, even while they sleep, enhancing their quality of life.
Wes Swaney Little Caesar’s and PayMore franchisee states “At most, it’s a 9-to-6 shift Monday through Saturday with no prep, no kitchen cleanup, just turn on the lights and you’re ready,” he said, comparing the long hours he and his staff keep running restaurants.
GLO30, a subscription-based skincare studio, taps into the booming 1.5T global wellness and self-care industry. As consumers increasingly prioritize self-care, wellness services have become less of a luxury and more of a necessity. GLO30’s focus on facial and beauty treatments aligns with current consumer trends, making it a promising investment for those looking to diversify. The wellness sector’s resilience to economic shifts also makes it an appealing choice for franchisees seeking stable revenue.
Swing Bays raises the question, what if the future of golf wasn’t on the course? Swing Bays is taking the game to a new level with its membership-based indoor golf simulators, offering PGA professional instruction and TPI fitness sessions. In a $227 billion industry, Swing Bays merges expert coaching with cutting-edge fitness programs, creating a unique space where golf meets science. Founded by PGA Pro Dustin Miller, Swing Bays is redefining how golfers train, play, and sustain their game. As the demand for innovative, tech-forward golf experiences grows, Swing Bays stands out as a forward-thinking choice, particularly for food franchisees looking to diversify their portfolios.
The Benefits of Diversifying into Non-Food Sectors
Diversifying into non-food sectors offers franchisees a range of benefits, chief among them being stability and reduced risk. Non-food industries, such as technology, wellness, and entertainment, are often less susceptible to the economic fluctuations that can impact the food sector. Many of these sectors, particularly wellness and fitness, leverage membership models that generate predictable, recurring revenue. For instance, franchises like GLO30 and Swing Bays, often thrive on consistent membership fees, providing a steady income stream regardless of daily fluctuations in customer visits.
Furthermore, non-food franchises allow investors to capitalize on emerging trends. As consumer demands evolve, sectors such as wellness and entertainment are seeing substantial growth, often driven by subscription-based services. By entering these markets, franchisees can tap into new revenue streams and stay ahead of industry shifts.
Expanding into non-food sectors also allows franchisees to reach different demographics. For instance, while a fast-food franchise might primarily attract younger customers, a wellness or tech brand appeals to a broader or entirely different audience. This diversification in the customer base, coupled with the stability of membership-driven revenue, can help stabilize income and provide new opportunities for growth.