What FRANdata Thinks

2021 Vol 3 Insights From The Latest New Concept Report

August 17th, 2021 by TJ Wagman

FRANdata identified 85 new franchise brands across 18 industries in Q2 2021. A majority of new brands
operated in the Quick Service Restaurant industry, followed by the health and fitness vertical.
Despite the impact of the pandemic, 19% of all new brands identified in this quarter were QSR concepts,
with a number of them offering ethnic menu items such as Japanese food, Mexican fast food, etc.
In the aftermath of the pandemic, new health and fitness brands identified in this quarter are ones
focusing on services that are least impacted by pandemic-related precautions. Health and fitness brands
accounted for 18% of all new brands this quarter. We are seeing more mobile fitness concepts offering
one-on-one, personal, and small group training sessions in response to COVID. In addition to these
mobile concepts, we have seen the emergence of new concepts offering alternative medicine and
health, including vitamin IV infusion, mental and behavioral health services, occupational services, and the like.

Brands with High Average Unit Revenues (AUV)
Close to 44% of new brands identified in this quarter offer transparency around unit-level topline
performance. The average unit revenues for these 38 brands were more than $400,000 in 2020. Nine
concepts had average revenues exceeding $500,000.

Brands Poised for Growth
83% of new brands identified in this quarter started franchising in 2020-2021, as such carried no
franchised units. However, several brands in this quarter’s report are projecting rapid growth in 2021,
through multi-unit deals with a combination of experienced entrepreneurs and existing franchisees.
For example, Scenthound signed up a multi-unit development deal with Dean DeGood, who owned
Doggywalker Online, a dog walking and pet sitting service in Virginia with more than 85 employees. They
also partnered with Mariano Espinosa, who has 20-plus years of experience in corporate finance at

Prior Franchise Experience
A few brands in this quarter’s list are benefitting from prior franchise experience from their respective
parent companies and other partnerships. For instance, after stepping down as the CEO of Lift Brands,
Peter Taunton, who helped grow Snap Fitness to over 1,000 franchised locations, partnered with the
founders of Nautica Bowl, Rachel and Bryant Amundson, to develop the franchise model for the
concept. Meanwhile, a new concept like Rumble is benefitting from becoming a portfolio concept with
Xponential Fitness, which also owns 8 fitness franchises including Club Pilates, Cyclebar and Pure Barre.

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