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When it comes to portfolio diversification, like most food franchises, I've traditionally turned to the holy trinity of restaurant franchise investments: burgers, chicken and pizza. Further diversification meant leaning into sandwich, dessert chains or other emerging segments within foodservice, such as when we grew the Middle East's largest halal chain, Halal guys.
But with the headwinds they face the restaurant industry today, food franchises seeking generational wealth face a conundrum. The costs associated with opening and running a restaurant these days are astronomical – it gets harder. Everything is more expensive: equipment, wages, ingredients, rent. However, even with wages in one all time highrestaurants are struggling to hire and retain employees.
That's why entrepreneurs like me, they are also starting to invest in non-food categories that cost less to start up, require far less staff and, most importantly, offer a greater return on investment.
Entrepreneurship in non-food franchises
To be clear, I am not giving up food. I have spent 30 years turning brands around Five Boys, QDOBAAND Halal guys in national players. As an early franchise partner at Five Guys, we made millions growing and selling our franchises. This is big business. However, it finally dawned on me that diversifying outside of food might be a good idea.
IN Fransmartwe are in business to help people get rich through franchising. My passion – and fiduciary responsibility – is to grow the balance sheet as much as I can. Traditional brands aren't cutting it these days, with once-thriving concepts like Rubio and Red Lobster are recently featured for bankruptcy.
Greg Flynn, of the world the largest restaurant franchiserecently renamed his company after becoming a Planet Fitness franchisee – Flynn Restaurant Group is now LP Flynn Group. Flynn believes Planet Fitness will be an excellent growth channel for his company since it requires fewer employees than restaurants.
“It's less intense,” he told me when I interviewed him in April “Smart franchise with Fransmart” podcast.
Discovery of GLO30
As I advise clients to venture outside of food, I'm also putting skin in the game. For the first time since becoming a Five Guys franchise partner 15 years ago, I am now one GLO30 franchise partner.
Washington, DC-based GLO30, founded by Dr. Arleen K. Lamba, is one skin care studio bridging the gap between facial spas and medical spas. It offers medically-backed facials that blend medical science with personalized, seasonally tailored AI-assisted treatments, along with at-home, drugstore skin care.
A proprietary AI-based system called GLOria scans each guest's face upon arrival and creates a personalized treatment to be performed by the beautician. Proprietary maintenance products are also sold locally. Its main revenue stream is related to the company's subscription mode. Members return every 30 days for a treatment that is likely to change each time, creating a reliable income stream. Customers build relationships with their service providers – more than 65% of GLO30's original membership groups are still part of the program.
Today, Fransmart is working with Dr. Lamba and her team to help them achieve a goal of growing GLO30 to 1,000 locations in 10 years.
Worried about running a non-food business?
I didn't know much about it skin carebut I know about market research and trends. Health and self-care is one of the fastest growing retail segments in the US. Already a $1.5 trillion global market, it remains highly fragmented. Despite this, it has become a sought-after tenant for High Streets and malls, as landlords care about the health and well-being of shoppers. Services like facials cannot be offered online, therefore such businesses as Massage Envy and Club Pilates have grown rapidly.
And I know about ROI. GLO30's incredible ROI cannot be found in the restaurant industry.
In terms of learning the business, I'm in the same position as any other franchisee. I don't need to know chemicals or how to operate equipment. I will hire the right managersfind the right locations, follow the playbook and reinvest my profits into new stores. So if your goal is financial independence and amassing wealth by investing in a franchise, it's time to consider your options outside of food.
Blitzscaling for success
My GLO30 partners and I are using a different investment strategy called blitzscaling. Instead of opening multiple stores at once, we open one store at a time and use the profits to buy more GLO30. It involves reinvesting profits in more stores, increasing returns. They continue to invest until the stores can be self-financing, allowing us to turn a profit or sell.
In contrast, restaurants usually take longer to reach that point with constant reinvestment. Non-food franchises like GLO30 offer higher returns. So while I will always be passionate about food franchisesFransmart is paving the way for entrepreneurs to earn generational wealth by investing in new retail brands that are on the verge of exponential growth.
We're proving it can be done, while having a little fun along the way.
Related: California Fast Food Workers Now Earn $20 Minimum Wage – Here's How It Will Affect Franchises
