The entire concept of franchising is built on systems—but in a tough economy, it may be time to rethink your system. Consider the example of Robert Shapiro and his partners, whose company franchises personal training centers called One2One and upscale health clubs called BodyScapes.
The company had been doing great, The Boston Herald reports, until about six months ago when the credit crunch drastically slowed sales of new franchises. Potential franchisees were still interested in the concepts, but couldn’t get financing to open a location.
So Shapiro decided to try something out of the ordinary. Instead of having franchisees find locations, he and his partners are selecting locations, even signing the leases, and then searching for good franchise candidates to run the centers. While potential franchisees will most likely still need financing, Shapiro is betting money will be easier to get with a location already secured.
Now is a good time to try this type of tactic. More and more retail space is opening up, as this Ad Age article reports, and smart businesses are taking advantage of the times to snap up prime locations and negotiate good deals.
“There’s going to be a lot of opportunity out there,” Ad Age cites Charles Wetzel, president-chief operating officer of market-planning firm Buxton, as saying. “I firmly believe, if you’re small and have a good brand that customers like, this is the year to exploit growth opportunities.”
The International Council of Shopping Centers expects there will be even more vacancies in 2010. Darren Tristano of the food industry consulting business Technomic told Ad Age that franchise organizations with adequate financing in place will have more leeway to expand than most businesses.
Shapiro acknowledges his new location strategy could backfire; if the partners can’t find a franchisee in time, they’ll still have to pay rent. However, in that case, they plan to operate the location as a company-owned business until they can find a franchisee.
It’s a gutsy strategy, but as Shapiro says: “What I’ve learned in business is that you have to evolve with the times or you are going to get lost.” That’s an attitude all of us—franchisors and franchisees alike—must take to heart.
Rieva Lesonsky is president and founder of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva on Twitter.com/Rieva. Visit SmallBizDaily.com to read more of Rieva’s insights on small business and to buy her newest book, Marketing 101: Quick Tips for Marketing Your Business.