A once in a lifetime global pandemic touched every aspect of our lives. How we live, how we eat, how we greet each other and how we work. Except for a few dozen billionaires, who watched their wealth grow despite the economic ravages of COVID-19, nearly everyone was glad to see the year 2020 fade into the rear-view mirror. Unprecedented economic fallout descended upon the intersection of business and commerce, leading to unemployment levels not seen in the past century.
Seems like the ideal time to run out and buy a franchise to kick off 2021, doesn’t it? While at first glance, the risk-averse among us would put up the sign of the cross, slam on the brakes, or even ask the questioner if they’re feeling a bit feverish. But there’s another side of the coin to consider. As the great ESPN college football commentator Lee Corso would interject---“NOT so fast, my friend!”
So, it begs the question, is there a silver lining to consider for buying into a franchise operation during the middle of an economic crisis and a pandemic that’s still a threat—despite vaccines? Why franchising? Why now?
Let us count the ways:
If the current economic conditions are giving you a sense of déjà vu, you aren’t imagining it. It was just over a decade ago we dealt with the Great Recession. By and large, franchise operations were able to weather the storm, likely due in part to their key advantage of following a proven business model. What got us through then, can take us through now. Additional factors to consider--qualified buyers can now access capital at historically low interest rates and high unemployment levels could provide excellent staffing opportunities. This could be the winning combination that spurs growth within the franchising industry in 2021.
Variety is Always in Demand
It’s important to find a franchise business model that matches with your investment level, lifestyle and revenue goals. Once you’ve set your parameters, you’re ready to investigate specific concepts that fit these criteria. Thankfully, the spectrum of franchising is wide and inclusive, with business models in almost 100 different industries. The spectrum categorizes franchise operations by how they work and what your role will look like. From high-investment, site-sensitive, sales-driven business concepts to low buy-in, location-free, direct-sales operations. With franchising, you’ll never want for more choices.
Almost every franchise brand adapted quickly to operating in the midst of a pandemic. What this baptism of fire revealed is that most franchise owners could handle the sale of products and services remotely. The rapid deployment of tech-friendly upgrades created efficiencies we never could have imagined prior to the pandemic. Those assets are still in place—and may not be going away, even under a complete return to normalcy.
Time to Strike?
It’s estimated that over 100,000 restaurants in the U.S. went out of business in the past year. But people’s appetite for dining out hasn’t decreased. In fact, most openly joke about the extra weight they’ve put on because of stress-eating. The real question is, what dining establishments will rush in to fill the void of eateries once the pandemic subsides and our public health is no longer at constant risk? For QSRs and other franchised eateries, this could be an advantageous time to investigate your territorial options by evaluating your local restaurant/hospitality market outlook.
Franchise Concepts That Flourished
Despite the down economic year, many franchise operations actually flourished under the pandemic’s conditions. Franchises such as home services, home improvement, flooring, décor, tree trimming, window washing and painting actually grew in popularity (and revenue). When people are forced to stay home and focus on their dwelling, coupled with discretionary cash not spent on vacations and commutes, it became a boon for these industries.
The pandemic has affected nearly all levels of commerce and industry, upending much of the status quo. What’s left in its wake could be the opportunity you need to establish yourself as a business owner through franchising. Access and avenues to capital and resources are plentiful. This, coupled with low interest rates, a deep pool of employee talent, franchise discounts, special deal offers and attractive investment positioning, has now created the potential to make it a true buyer’s market.
Will you be among the budding entrepreneurs who decide 2021 is the right time to take the proverbial leap of faith? If so, you just might end up as your own boss, with the business of your dreams.