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Buying a franchise during recession

Written by: Nick Strong

Article Overview: In this article Nick Strong looks at the dinamic of franchise purcvhasing and recruitment during times of economic growth and during the downturn. Nick explores how, even in times of economic challenge, business format franching can offer benefits to both franchior and people buying a franchise.

Buying a franchise during recession

Historically franchise recruitment managers will tell you that when times are good in the economy, new recruitment slows down. This is because people who would like to be self employed, via franchise business development, are simply too comfortable. They want to become self employed but don't want to take the risk of giving up the day job or moving highly performing share capital.


However, in the down times this all changes and franchise recruitment increases. This is because the comfort blanket of job and investment security can be removed. So is the motivator of having your comfort removed a negative one?

In many ways it can be the best thing that can happen. This is because the removal of security can release the ‘would be’ business builder into being proactive. The result can be the achievement of self employed empowerment via franchise business building.


It is anticipated that 2009 will be a very good year for franchise sales in the UK. This is good news for the economy, new franchise business owners and franchisors.

So is there a market for new franchise business owners? People are still buying products and services; they are simply focusing more on value. This is good news for franchise builders. The concept of franchising is to build your business around proven best practise. What the customer wants and wil pay is always the focus of quality franchise operations.

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Article Tags: business builder, business building, business development, business owners, comfort blanket, day job, economy, empowerment, franchise builders, franchise business, franchise operations, franchise recruitment, franchise sales, franchisors, good year, investment security, motivator, quality franchise, risk, share capital



Related Forum Posts
Re: Top 9 Franchises for 2009 - Although I will probably never buy a franchise, this post is really interesting to me. I'm very surprised at some of the names on the list. I think someone should start a franchise in slightly used clothing/shoes. We have a couple of really nice 2nd hand stores near me and they are doing REALLY well right now as people are trying to pinch pennies in the recession.
Re: Are Economic Recessions Good for Franchising? - All we can do is remain wide awake and pay attention to the ebb and flow. My strategy is to be prepared and go with the flow. There could be some rough times ahead... Interestingly, our business has remained strong. I believe it's because we're in such a tight little niche and we're well positioned to sign jobs nationwide, therefore we're not restricted to location. We also target affluent markets that have higher disposable incomes - this we do locally. Here are some Franchise Categories that could weather a good recession... Health and Personal Care Food services like Subway Debt Collection Tax Preparers & Advisors Any other recession proof franchise opps out there?
How Do I Start Franchise? - How do I start a franchise? Before one can start a franchise it is important that you do your homework and research your market thoroughly so that you know what you are getting into. To start a franchise, it is vital that you: First, investigate all the franchise opportunities available to you by visiting franchise trade shows or by contacting a franchise agent. Also talk to family, friends or relatives who have set up a franchise, or who know some one who has set up a franchise. It is good to get as much information as possible from fellow franchisees, as not all franchises are good investments Second, talk to franchise owners that are in a franchise similar in to the one you would like to invest in. Ask them if they are pleased they are with their decision, and how well their business is doing. Is it meeting their expectations? Also ask questions about the franchiser and how responsive it is. It is important to determine the integrity of the franchiser you are interested in doing business with. Third, consult any and all advisers. Have an accountant review the audited financial statements the franchiser presents you with, and bring in a lawyer to help review all the legal documents before you sing them. Fourth, thoroughly read the Uniform Franchise Offering Circular, which is a disclosure document in which the franchiser must release certain information such as, any and all administrative, criminal or civil litigation currently pending or completed against the franchiser involving allegations of fraud or misrepresentation. It is a recommendation of the FTC that all franchisers supply a UFOC to prospective franchisees. Also make sure to verify and confirm the UFOC facts. Do a background check on the history and experience of the franchise and its employees. Fifth, compare other franchises. Look for franchises similar to the one you are interested in investing in, and see how well they are managed and financed. Sixth, know and be fully aware of all the terms and conditions of the purchasing contract you are about to sign. Seventh, research as much as you can. Buying a franchise is a complex process and should be approached with caution. The more information you know, the better it is for you. Remember, only you can determine if owning a particular franchise is right for you. When starting a franchise it is key that you evaluate yourself and see if a franchise is the right business investment for you. Investing in a franchise should not be taken lightly as it can be a risky business. It is important that you consider all the facts before you make a decision to invest in a franchise.
Re: Are Economic Recessions Good for Franchising? - well, I can't give you any verified stats at the moment. But, it's a fact that as more and more people face layoffs they look in the direction of franchising. These are folks that need the security of a proven business model and have resources to jump into a franchise. It's a clear trend that has been witnessed in past recessions. My concern is that we are not in a simple recession... If you look at a recession as a big storm that will create some havoc and disrupt lives, then the events we're facing in the near future could be a supersized hurricane. We're heading into uncharted waters. High fuel costs, which will probably fluctuate for a while then jump again High debt loads... now in the trillions Sinking housing market... how low will it go? The US war machine is in full swing... with eyes on IRAN All of these factors are clashing to create the Perfect Storm and I don't like it one bit. I tell ya, there's a bunch of madmen at the helm. So how does this bode for franchising? jeez... I don't know... I'm gonna get myself a double scotch on the rocks. Cheers.
Re: Obama Wants Social Security for Illegals - [quote="Lucy Wu":2dlphfqu]I think America's biggest problem right now is clearly the recession, and that should be the main focus as of now.[/quote:2dlphfqu] I agree. Do you think President Elect Obama is doing or will do what is best in terms of beating this recession?


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