Are Some Franchises Just Fads?

I was asked this question the other day buy a client who was exploring opening either a new franchise or buying a small business because he was uncertain about the long term viability of the industry he worked in.

Unfortunately I had tell him in my opinion some franchising concepts recently launched in the last few years are definitely turning out to look like fads. One example is the meal or dinner preparation franchise concept. Personally I never got this concept from the get go because I guess im a guy and im single. But meal preparation services were marketed to consumers as a time saving convenience for busy moms or parents to prepare all meals for say a week times at the franchise location kitchen, and then freeze them, and serve the throughout the week. Most were charging monthly memberships to consumers.

There was an initial bust of rapid growth in 2003-2005 with Dream Dinners franchise leading the way with, and a host of copy cat franchises following. However from what I hear and have seen in my own market (Phoenix-metro) over that last few years, many meal prep franchise locations have closed or are closing at a rapid pace. From what I hear, many franchisees felt they were oversold on this concept as a proven business model, and unfortunately many have lost a good deal of money and have no chance or recouping their investment.

I guess one of the lessons I see here is to follow your instincts and ask yourself honestly whether a new “hot” franchise concept you are introduced to has the right ingredients to be a sustainable business concept and not just a passing fad. And of course, do your due diligence before investing in any franchise concept.