Nowhere was that more on display than at the annual International Franchise Expo being held in New York City, where 400 exhibitors are pitching their business model to prospective franchisees.
At ice cream chain Carvel, which was founded in 1934 and numbers over 400 locations, executives have spiced up the menu of frozen cakes and creamy sundaes and introduced new store designs. The goal is to compete against big, deep-pocketed rivals in Dunkin Brands' (DNKN) Baskin Robbins and Sonic (SONC). "The biggest trend for us is people looking for innovation and excitement," said Carvel President Scott Colwell in an interview at the trade show.
In March, Carvel reintroduced Nutella-based sundaes and shakes that, according to Colwell, were "extremely well received." On June 2, the 81-year old brand announced a partnership with Reese's, bringing peanut butter-flavored sundaes and shakes to stores. And come the fall, Carvel will bring back pumpkin-flavored soft service ice cream.
Carvel's evolution arrives as its competitors have been thriving. Baskin Robbin's sales rose 12.7% last year driven by sales of cups, cones, beverages, cakes, and take-home ice cream quarts. Sonic has launched real ice cream shakes and frozen "blasts" in an array of flavor combinations, and ice cream sales have risen 50% dating back to 2011.
Similar to Carvel, California-based Chronic Tacos is taking aim at larger rivals in Chipotle and Yum! Brands' (YUM) Taco Bell by offering street-style tacos and cooler-looking restaurants.
On the menu for the 30-store chain are items such as hand-cut Mahi Mahi or Ono (fish) tacos served grilled or beer battered. The company is also using all-natural ingredients to attract millennials, a group that is questioning the origins of ingredients like never before.
Chipotle has mostly kept its menu identical since it launched in 1993, and does not offer fish. Taco Bell is quintessential fast food, with many processed ingredients although the chain has said it is eliminating all artificial flavors and colorings.
While the restaurant industry is dominated by several well-known national names doing battle with several upstarts, the gym industry is fragmented. A dominant share of the gym industry seems ripe for the taking, and some chains are stepping up to see if they can hold the title.
According to research firm IBIS World, the 50 largest gym companies in the country only control about 30% of the market, with only a dozen or so companies owning more than ten centers.
Currently there is only one publicly traded gym company left in Town Sports International (TOWN), which operates popular brands such as New York Sports Club and Boston Sports Club with over 150 locations along the East Coast. Lifetime Fitness, a high-end gym operator, was acquired by Leonard Green & Partners and TPG Capital in 2015 in a transaction valued at more than $4 billion.
But the rise of discount gyms such as Planet Fitness, Retro Fitness and Anytime Fitness offering affordable monthly memberships of $10 to $40 a month is helping to consolidate the industry.
"We are at 132 locations right now, we will open 30 to 40 this year, and are looking to open 50 to 100 per year," said Retro Fitness founder Eric Casaburi. Newer markets for Retro Fitness are in prime locations for baby boomers such as Jacksonville and Orlando, Florida, where retirees are looking to improve their health and live longer. A visit to the gym for an affordable price is an easy sell to a boomer.
Meanwhile, Planet Fitness opened its one thousandth location on June 9 in Washington, DC, and Anytime Fitness now boasts over 3,000 locations across the country.
One way a Retro Fitness is seeking to differentiate relative to larger rivals in Planet Fitness and Anytime Fitness, is through the use of technology. Most notably, Retro Fitness is developing tools for members that may be wearing Apple's (AAPL) Apple Watch or a Fitbit (FIT).
"Fitness wearables is something we adopted early,"said Casaburi. "We are looking over the next two quarters at unveiling some amazing technology in our gyms that will blow our members' minds -- it will be able to track your fitness when you are walking outside, or on one of our treadmills."
The heightened competition between upstart franchises and established behemoths is adding up to some nice economic activity in the United States.
According to the International Franchise Association, the franchise industry saw a 2.9% increase in job creation in 2015, reaching 8.8 million jobs within the industry. More than 12,000 new franchise locations are expected to open their doors this year.
The reason for the spike? "I think people more today than ever before want to be in business for themselves," said Tom Portesy, president of MFV Expositions.