What types of franchises traditionally are more solid during a recession?
Let’s face it, the mere word “recession” strikes fear into many people, because it implies hardship, job loss, and therefore, loss of income. So, in times of recession, those without jobs, but with the economic means, will seek to replace routine employment with self-employment. This is a common scenario found in each economic downturn.
Now, franchise consultants, at least those with true knowledge of the industry, will always advise in favor of purchasing a franchise opportunity that best fits the buyer, but what if funds are not available for the ‘perfect business’? Then logic dictates that ‘you do what you have to do’, and often that means buying the best job you can afford. Sorry to be so blunt about it, but many entrepreneurs have been borne out of hardship.
Remember, the purchase of a franchise usually demands that the investment be collateralized by the buyer’s present assets. And in times of recession, qualifications may be ‘tightened’. That doesn’t mean that funds aren’t available, but the buyer may be reluctant to bend to the demand. The bottom line is this: if a ‘quality’ franchise investment represents a means to replace a job (or better yet, create a new found lifestyle), then the option is positive. If successful, one can always move into a different business or expand beyond the initial investment.