Everything you need to know for 2021 in FranchiseA franchise is when a business (franchisor) allows a party (franchisee) to acquire its know-how, procedures, processes, trademarks, intellectual property, use of its business model, brand and rights to sell its products and services. The franchisee signs a contract (franchise agreement) with the franchisor to acquire the franchise and generally has a territory granted to operate…. and Small Business Opportunities
Hey, Patrick Findaro here with Vetted Biz. At Vetted Biz We help you find, vet, and buy a franchise or business for sale across the United States. Right now we have over 3000 businesses for sale on our website. Of those about 1,800 are franchises, and many of them outside the franchises are independent businesses for sale are mostly in the state of Florida. Let us know where you’re living, what state you’d like to have more business opportunities, and we’ll definitely prioritize that. Today I want to talk about 2021. Let’s put 2020 behind. I mean, this has been the longest eight months in my life. And it’s been kind of a tale of two cities.
When you look at comparing cities like Miami to Los Angeles, we’re talking to restaurant and business owners in LA County, there’s been restrictions pretty much on and off for the last eight months. Where in Miami-Dade County restaurants have been running at full capacity or allowed to have, you know, no limits in terms of the amount of people inside for over a month now. So you have businesses that are operating pretty well in the food and beverage space in Miami-Dade County, ones that have been very adaptable in terms of catering to client concerns and also adapting to delivering takeout. And you have other ones that have tried to adapt as much as possible but just given the city, the county that they’re operating in, the state that they’re operating in, they’re in just a lot different circumstances.
Smooth-sailing, change-making franchises
A big thing I’d say for 2020, the winners and losers in terms of franchises and businesses is adaptability. Were you able to navigate and make changes? So that could be with an education franchise where we had a franchise who were on a live stream a couple of weeks ago, who mentioned that right away, they started pivoting to online learning. They were already going to get in the online learning space, and then they doubled down in terms of the money that they were spending on developers and then the marketing costs to attract students that were interested in distance learning for supplemental education. Also had an ice cream franchise in Oran the other week, nitrogen-infused ice cream that they just started adding more nitrogen and found out that the ice cream would stay frozen a lot longer for delivery and takeout.
So pretty simple effect but they adjusted very fast and really added that to their marketing message and worked very closely with third-party apps. So you had some industries like health and beauty, food and beverage, education that you had to adapt very fast, or you could have failed and gone bankrupt. And then other ones that it was more forgiving, essential services that have to happen regardless where it could be like landscaping, where, you know, maybe you scale back the hours a little bit but you’re still going to need to have that commercial landscaping done on your property that you have a strip mall with another 15 tenants and that’s part of the lease that you’re maintaining the property at the very least.
Top franchises to keep in mind in 2021
So some businesses like landscaping, you know, for 2021, definitely an item to look at. Real estate property management, another one where it’s kind of split for 2020, where you have some franchise wars that didn’t really adapt. And other ones like in the vacation real estate market where they adjusted. And instead of requiring one-week stays, they cut it down to three days minimum, and they’re able to get a lot more folks from the Northeast down to Florida. And they also are getting money in terms of the pool fees, the property maintenance, cleaning fees. They’re not getting as much money in terms of the fees incurred by booking. However, they’re getting twice as much fees in terms of the cleaning. So it’s really about adaptability when it comes to 2020 and then 2021 looking at some of the lasting trends.
So travel and hospitality, pretty much hotels, motels, that traditionally has been a safe industry when you look at independent businesses and franchises. For franchises, for every nine businesses that were able to pay their SBA loan in full, one defaulted. So 9:1 success ratio. I think that’s
going to fall a lot in 2021, 2022, and beyond. I think that number is going to come down, whether it’s 5:1, 6:1, I’m not sure but I bet that a lot more businesses in the hospitality industry are going to fail as a result of decreased corporate travel, personal travel. Talking to a lot of executives here in South Florida, they are reassessing whether their middle managers need to go on business class tickets to the West Coast or to Europe or to South America, and the frequency that their executives need to be traveling.
So a lot of those hotels that are catering to business travelers are definitely already hurting in 2020 and are probably going to be hurting for the foreseeable future. That’s a major trend that we’re seeing. Some items to be mindful of also fitness, big-box gyms, and large gyms. I don’t know if it’s going to return to the same where people are going to be comfortable to always be in the same space. Right now it’s December 22nd, 2020. Now we’re hearing about a new strand of COVID emerging from the UK. Is this going to be a reality that we’re faced with and people are going to be cautious and wearing masks and using PURELL everywhere they go? Time will tell. This would not be the time, in my opinion, to invest millions of dollars in a very nice gym build-out. That’s going to be a 5,000 square foot gym. Probably want to wait to see what happens and if people are really comfortable going into next year, going to such a large fitness facility. You might want to look more at boutique fitness.
Some areas that we suggest people look at are cleaning and maintenance, other service-based businesses like bookkeeping and tax prep, where you have that recurring revenue coming in. Where you can count on the same client coming in using the services every month. And you can reallocate resources to focus on salesThe total amount in dollars made in the business before expenses are deducted. See also Gross Revenue…. and marketing and not be so afraid of that base revenue coming in because you know that client is going to be around and they need your bookkeeping service. And as long as your product and your client service is good enough, you’re going to keep that revenue. So we do like different service-based businesses, whether they are real estate property management, bookkeeping, and tax preparation, cleaning, and maintenance. Those are all industries that I would look at for 2021.
Are you interested in a business or franchise?
If you’re interested in investing, you know, around $70,000, $100,000 in a business or franchise, there are a lot of service-based concepts that are well poised going into 2021. And then another hot item is ghost kitchens. So this would be food and beverage businesses that are operating out of a common kitchen, where you might have 10 different restaurant concepts. And instead of investing $500,000, $700,000, building out, permits, equipment, you can invest as little as $100,000 dollars. And all you do is delivery and takeout, you leverage third-party apps, and you’re able to recoup your capital a lot faster than a traditional restaurant investment.
It’s important to talk to franchisors, talk to franchisees that are already operating ghost kitchens so you can understand when your payback is when you’re going to recoup your initial capital investment. Delivery apps, whether it be Uber eats DoorDash have gone up revenue-wise nearly 100% year over year. So it’s important to ride trends, ride that wave. And the big trend right now is delivery and takeout. And I believe that consumers, they’ve already become used to doing delivery more often and takeout more often and spending more time at home. And that habit is probably going to be hard to change after Americans have been living like that and people throughout the world for the last eight or nine months.
So we’re definitely bullish on delivery and takeout establishments and looking at operating your business, your food, and beverage business out of a ghost kitchen, where the rents are a lot more flexible. Instead of a 10-year commitment for a lease, it could be as little as one year that you can renew year after year. So in summary, we like service-based businesses. I mentioned a few. Landscaping, cleaning, maintenance businesses. On the food and beverage side, ghost kitchens and other businesses that operate principally for takeout and delivery. Real estate property management, those are some of the businesses that we’re bullish on for 2021. I would stay clear for now for anything in hospitality-related in particular hotels and motels. Let’s see what happens and if travel resumes as well as much as the airlines are saying they’re going to be resuming, I want to see.
I would stay on the sidelines, wait to see and invest in what’s doing well now and what most likely will be doing well for the next three years to come, and has made a strong comeback. And then it’s really important, do your due diligenceVetted Biz goes through a vetting process and evaluation of all businesses featured on our website to make sure they comply with the Vetted Biz standard and are reliable business opportunities for future small business owners….. If you’re looking at buying an existing business, hire a CPA, review the books, talk to the existing customers, do your due diligence before buying in a business. And if it’s a franchise, you have the beauty of talking to existing franchisees, understand how they’ve done during COVID. If they’ve done well during COVID or they’ve done well at least in the last few months, there’s a strong probability that they’re going to be going into 2021 strong.
However, if they’ve struggled over the last few months and they haven’t adapted their business model, I want to be so bullish on that business opportunity, having a miraculous comeback in March, April, May of 2021. So this has been Patrick Findora, co-founder at Vetted Biz. We help you find, vet, and buy franchise or business for sale. If you liked this video, share it, like it on YouTube, tell your friends. As I mentioned, if you’re looking for a business to buy, we’re building up Florida opportunities right now. We have 1,600 businesses for sale in Florida. Some of those are franchise resales. Most are independent businesses but tell us where you’d like us to focus. Are you interested in investing in Texas? A lot of Californians are moving there. What states are you looking to buy a business so that we can help provide more business opportunities to you? Thanks again, and I hope you appreciated this video.