Have You Considered Franchise Ownership During Economic Uncertainty? - Franchise Business Source


Have You Considered Franchise Ownership During Economic Uncertainty?

27 March, 2020 0 comment

In a January 7, 2009 report[1], PricewaterhouseCoopers forecasted that the number of franchise establishments would decline 1.2 percent in 2009 after a 2.1 percent increase in the number of establishments in 2008.

In a similar report[2] published the following year, PricewaterhouseCoopers estimated the 2009 decline in franchise establishments was only 0.1 percent versus the predicted decline of 1.2 percent. They believed 2010 would see a 2.0 percent increase as the economy pulled out of the recession that started in December 2007.

In fact, while the economic outlook was bleak in 2008, 49.1 percent of franchise business leaders expected to perform better in 2009 and 35.9% expected to perform similarly.

That was an 85 percent confidence in their business performance despite economic uncertainty!

Why Now is the Time to Evaluate Franchise Ownership

In their January 2009 report, PricewaterhouseCoopers found that many franchisors were handling the 2008 economic slump by reducing budgets, strictly managing overhead costs and applying other tactics.

This activity suggests pragmatism, not pessimism, about the future. Franchisors still believed “…the entrepreneurial spirit of franchisees and the fundamentals of the franchise business model…” would help them endure the economic downturn.

People who were fearful about becoming franchise owners in 2008 and 2009 missed the boat. They sat on the sidelines waiting for an economic upturn. But when it occurred, their competitors had already evaluated and started franchise businesses.

During this current global crisis, I’m seeing a surge in opportunity-seekers similar to 2008 and 2009. Current and prospective franchise owners are optimistic about a quick turnaround in growth, especially as they witness the innovation, nimbleness and support of franchisors.

How To Know You’re Ready For Franchise Ownership

When the economy is doing well, people are content in their current job. They believe they can be hired easily and quickly if they decide to leave their company or if they’re laid off.

But when the economy becomes volatile, people start to evaluate their career and ask themselves questions:

    • Why do I feel trapped in a job market that provides little to no security or future?
    • Why do I feel as if I have nowhere to turn after a lay off except to try and find the same job with a different company?
    • Why was my pay cut and when it will be reinstated? Or is the next step job elimination?

If you’re asking yourself these and similar questions, consider franchise ownership. Especially if you see yourself as a leader wanting to meet customer needs, manage employees as valued contributors, and give back to the community.

As fear consumes the decision-making processes of wannabe entrepreneurs in the coming weeks and months, you can start an active evaluation now to understand what it means to own and operate a franchise.

Avoid the rush to start a business as more and more people see the opportunity of investing in a franchise as the government stimulus gains momentum and they feel increasingly secure about the economy.

By the time the people sticking to the sidelines decide it’s safe enough to look at franchise ownership, you will have moved from startup phase to growth phase. You will be the entrepreneur with loyal consumers, making it difficult for latecomers to take away your market share.

Partner With a Franchise Consultant To Evaluate Franchise Ownership

Instead of looking at franchise businesses that sound interesting, talk with a franchise consultant, like me, to determine if the underlying model meets your vision of yourself as a business owner and to recognize where your skills fit into operating a business in general.

Understand what it takes for you to launch and sustain a new business. Establish a goal for your life as an entrepreneur. How else will you know when it’s the right time to make the leap financially if you don’t know where you need to land personally?

Like executive recruiters who are compensated by their client companies for finding employees, franchise consultants are compensated by franchisors for finding entrepreneurs like you. Your only investment with a franchise consultant is your time.

Franchise Ownership Evaluation is Easy

Franchise consultants have extensive franchise knowledge to sift through hundreds of business ownership opportunities in a matter of days or weeks versus the months it takes for someone without franchise knowledge.

So, begin your evaluation of franchise ownership by calling me, Jeri Lucco, at 614-768-3884 for a free, no-obligation discussion.

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[1] PricewaterhouseCoopers LLP, Franchise Business Economic Outlook (January 7, 2009), prepared for The International Franchise Association Educational Foundation.

[2] PricewaterhouseCoopers LLP, 2010 Franchise Business Economic Outlook (December 21, 2009), prepared for The International Franchise Association Educational Foundation.

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