Page 71 - Business Plans that Work A Guide for Small Business

62 • Business Plans that Work

Trends

The industry on the whole is in a slow, long-term decline, but this is driven
by the dry cleaning segment. According to IBISWorld’s 2008 industry report,
laundry services are in a growth stage resulting from rapid growth in the tourism,
hospitality, and retail fashion trades. The report identifies these key industry
success factors:

• The ability to quickly adopt new technology
• The ability to accommodate environmental requirements
• Proximity to key markets
• Access to niche markets (so as to move away from general price-based
competition),

1.2 Franchising Overview
The U.S. franchise industry is huge. In 2005, there were
909,253 franchised establishments that produced output
Lazybones is bring-
6
ing together laundry and worth $880.9 billion and provided 11.0 million jobs.
franchising so it needs to talk Franchised businesses accounted for 4.4 percent of all
about the franchising as well.
public sector output in that year. It is also a growing
industry.
Between 2001 and 2005 output generated by franchised businesses grew at
an average annual rate of 9 percent.
There are a wide variety of business format franchise segments within
7
the industry. A typical segmentation, along with the revenues per segment in
2005, is shown in Exhibit 1.5. Lazybones fits into the fastest-growing segment,
personal services, which represents about 10 percent of
Again, the growth in the franchise market on the whole ($96 billion in 2005).
this industry supports the
Lazybones story that this is This segment grew 53.8 percent in the four years between
an attractive opportunity.
2001 and 2005.

6 Ibid.
7 The industry is typically divided into business format and traditional franchisers.
Traditional franchisers, like gas stations, allow franchisees to resell or distribute a
product along with its registered trademark. Business format franchisers, like fast-food
restaurants, offer their franchisees a format for running the business and operational
support. Business format franchisers have become by far the dominant variety,
representing 76 percent of total franchise revenues in 2007.