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The State of Franchising

Written by: David Lamb

Article Overview: The economic slowdown is hitting all facets and sectors of the business community, including those involved in franchising. Dina Dwyer-Owens is a successfull franchisor as head of The Dwyer Group. She is also the incoming Chairwoman of the International Franchise Association. Dwyer explains why she is convinced Franchisees have a leg up on the competition in an economic slowdown.

The State of Franchising

Dina Dwyer-Owens has a unique perspective from which to gauge the affects the nations economic woes are having on the franchise industry. As Chairwoman and CEO of the Dwyer Group she oversees the daily operations of nine different franchise brands. Brands that cover the service sector like Glass Doctor, Mr. Electric and Mr. Rooter. But, in February of 2009 Dwyer will add to her responsibilities as she becomes Chairwoman of the International Franchise Association (IFA), the world’s largest organization representing the franchise industry.
I caught up with Dwyer as the stock market was plummeting and the news was bleak. Surprisingly, she was upbeat when I asked what she thought the general outlook is for those in the franchise industry. “I think it should be one of optimism, I think overall there is a good feeling about the future,” she tells me from her Waco, Texas headquarters. “I think franchising has proven to be a model that works. Franchising always seems to pull through.”
From her position as VP of Communication and marketing for the IFA, Alisa Harrison comes in contact with franchisors and franchisees of all stripes. And she too feels that those in the industry have the right stuff to weather any economic storm. “Franchisors are by they’re nature entrepreneurs. They are aggressive marketers and I think they have done what they need to do as it pertains to their particular system, to keep the message out there and to keep people buying franchises.”
With more than 900,000 franchise businesses in existence, the effect of franchising on the economy is huge. Conversely, the effect of an economic slowdown could also have dire consequences for franchisors as well as franchisees. This is exactly why the IFA was such a huge supporter of the government bailout. Alisa Harrison, V.P. of Communication and Marketing for the IFA says the credit market component of the bailout was a major motivator in the group’s support of the legislation. “We worked very hard in trying to get the bailout package passed because so many of our members who rely on the credit market were having a hard time getting credit and it just slows everything down.” And now Harrison hopes the bailout’s passage will result in more opportunities to get financing for franchisees, “the thought is it will start to free up some of that credit market and we are waiting for that to happen.”
Dwyer agrees that the credit issue is a major concern for those in the industry. She is also convinced the franchise model is one that will be a major strength as the U.S. economy wades through the sludge of a slowdown. “The system that the franchisor provides may just be the thing that pulls them through in these times,” Dwyer-Owens says. “There are opportunities if you just open your eyes to them and you are willing to think a little differently about your business.”
In her role at the IFA, Harrison is an observer of the historical tendencies of franchising, in good times and bad. Harrison agrees with Dwyer in the fact that the franchise model is one that holds up incredibly well when tested. “Historically, franchise systems tend to outperform other businesses. The reasons are as simple as you are buying into a proven system, sales and marketing support and a proven system that does well in good times and bad.”
To further document the performance of the franchise model against other systems, Harrison said the IFA will begin conducting a comprehensive research project in November that will clearly document the affect an economic slowdown is having on the industry. The results of that survey will be made public early in 2009.
And when those results do come out in January, Dwyer-Owens feels certain the results will show a strong industry lead by men and women who have the proper mindset. “They naturally will have an optimistic view. The overall outlook is still very positive. I just have to think that we all will be pinched a little bit right now but if we can make it through this difficult time we’ll be ok.” An optimism shared by Harrison, “the franchise model, franchise systems is a great opportunity. If it is a good strong brand you will probably do well in good times and bad times,” Harrison says. “As we say often, owning a franchise allows you to be in business by yourself and not for yourself.” And that partnership could be the difference between success and failure to a franchise navigating economic uncertainty.

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Article Tags: aggressive marketers, alisa, bailout, buying franchises, chairwoman, dwyer group, economic slowdown, economic storm, economic woes, franchise brands, franchise businesses, franchise industry, franchisors, glass doctor, international franchise association, largest organization, mr rooter, service sector, texas headquarters, waco texas



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