Who's Buying What and Why?

The typical buyer of a franchise isn't typical anymore. The demographics are moving upscale. A recent joint study by DePaul University and the franchise consulting firm, Francorp, Inc. of Chicago, concludes that new franchisees have money, education, and business experience. 

For example, the study shows 35 percent of new franchisees are professionals with management experience, 30 percent are nonsupervisory white collar workers, and 15 percent are blue-collar workers. Additionally, more than 40 percent have a bachelor's degree. The franchise buyer's average income is $67,000, with 25 percent making over $75,000. 

Virtually every conceivable product and service will become available in the franchised format this decade. Look for medical services, general construction, plus various services targeted to help the working mother. Other fast-growing segments include training services, employee leasing firms, and businesses dealing with health and personal appearance. 

While this industry has been relatively immune to business cycles, that could change. With so much growth ahead, a new franchisee will need to be cautious that the business niche chosen has sufficient product or identity differentiation.