Common Themes in Franchising

by FBR

The overall franchise landscape is a very different place than it was five years ago. Thankfully, it’s also a different place than it was three years ago when the economy went bottoms-up. In a recent Franchise Times SuperBook article, FBR president and CEO Eric Stites discussed some of the common themes we’re seeing in franchising.

Good things come in small (investment) packages. When it comes to buying a franchise, the bigger investment doesn’t always result in the highest ROI. And, as Eric writes for the SuperBook, low-cost opportunities are more popular than ever.

Putting the “life” back in making a living. Entrepreneurs in today’s economy don’t necessarily want to make millions (or at least they recognize and accept that that may not happen). Many people are simply looking to run a good business, make a decent living, maintain a healthy work-life balance, and have fun in the process.

Sometimes, a recession actually helps. It goes without saying that, during a recession, people spend more money on what they need than on what they desire, but there are offerings—like child care and pet services—that remain in demand, regardless of what’s happening on the stock market. It’s not just about finding a franchise concept that’s recession-proof. Ultimately, franchisors and franchisees need to think of their business concepts in two ways: Will a business concept that was popular because of the recession be needed when the economy recovers, and vice versa?

National brands may not matter as much as community ties. Many franchisors will tout their national advertising budget or brand as a selling point, but, in a lot of cases, a franchisee’s biggest competitors are local, not national—especially in a struggling economy. Franchisees need to constantly market their services or products at the local level. Maintaining good relationships with other local businesses, schools, and community programs is always key to franchisee success.

Satisfaction (still) matters. The one thing that hasn’t changed in five years is the importance of franchisee satisfaction. Regardless of what’s going on in the economy, franchisee satisfaction is one of the primary indicators of a good business
 

Read the full article here.

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