While it may seem risky to open a business in the midst of a recession, one particular industry – franchising – is proving that the self-owned business model is still alive and well. And, for those entrepreneurs ready to experience the excitement of business ownership, opportunities exist in segments where the recession is actually fueling franchise growth.
“No industry is completely recession proof, but we are finding that there are several franchise sectors that are prospering due, in part, to the current state of the economy,” said Jania Bailey, president and COO of FranNet. “When financial change occurs, so do consumers’ needs and purchasing habits. As a result, a distinct group of businesses are now in higher demand.”
According to Bailey, franchises that focus on providing the necessities – as opposed to the luxuries – at an affordable price point, are best suited to thrive when times get tough. Furthermore, businesses that offer low-priced alternatives to goods and services typically cost less to start-up, making them an ideal choice for prospective first-time business owners.
“Right now, we are seeing growth in several of the low-cost service franchises, which typically cost $100,000 or less to open,” said Bailey. “With an investment of this size, little or no financing is typically needed, so businesspeople can ease into the transition of business ownership with minimal risk.”
Bailey says that although over 3,000 franchise companies exist, the following business categories would make particularly wise investments:
- Senior Care Services: According to the Administration on Aging, 37.9 million Americans are currently age 65 or older, and the population is expected to double over the next 30 years. Therefore, Bailey says that the need for elderly caregivers and assisted living businesses will not only remain high but will grow and prosper.
- Technology Solution Services: The influx of people using gadgets to navigate through personal and business affairs will come to depend on tech-savvy individuals for necessary repairs. Accordingly, the Bureau of Labor Statistics reports that an increase of more than 800,000 jobs in the Information Technology (IT) sector is expected over the 2006-2016 projections decade.
- Tutoring Services: According to Bailey, educationally-focused franchises are tough to deflate, as people have shown that they will spend on their children – in good times or bad. In addition to tutoring and supplemental educational opportunities, enrichment classes for art, music and sports are likely to continue to be in high demand.
- Home Repair Services: In lieu of purchasing a newer, bigger home, many people are investing in home repairs and renovations. Home repair services also have high value to sellers, who may be looking to revamp their properties before placing them on the market.
According to the International Franchise Association, franchised businesses generate a significant amount of economic activity in the country, including generating more jobs between 2001 and 2005 than several of the nation’s major economic sectors. With the guidance of a FranNet consultant, people can determine which type of franchise is best suited for them.
“There is no doubt that opening a business can present some challenges, but by venturing into a territory that has proven to be resilient, entrepreneurs can increase their chances for economic survival,” said Bailey. “We think that once they take the leap, many business individuals will find that business ownership can be a rewarding experience that offers the rare asset of job security.”
For more information about FranNet, visit www.frannet.com.