In 2019 and early 2020, the experts were predicting consistent growth in the franchise market.
The International Franchise Association, in its February 2020 report, forecasted that franchises in the U.S. would grow by 2.8%, adding 232,000 jobs in 2020, for a total of 8.67 million employees.
While Covid-19 may have altered that prediction somewhat, there is great news about franchising, even during an economic or health crisis. Many franchise brands are even thriving, depending on the industry.
So, for franchisors and franchisees (franchise owners), there are many reasons franchising will be more important in 2021 than ever before.
1- Successful franchise brands create jobs. While some franchisees have had to reduce their workforce, many were deemed essential businesses, and were able to stay open, remain profitable, and even expand and hire more workers.
And, because a franchise has a stable, successful business system and consistent products or services, it’s more likely to continue to attract customers.
2- Franchise business owners are in business for themselves, but not by themselves. Franchise businesses have the advantage of providing franchisees a corporate system of success and are not left alone to figure out what to do on a trial and error basis.
They have a structure and support system that is proven to work, making a franchise far less risky than a do-it-yourself endeavor.
3- During a financial downturn or other crisis, franchisees are not alone. Being part of a franchise brand gives franchisees a solid team they can rely on, share best practices and business techniques to more often weather unexpected economic or societal change better than independent business owners.
This is the power of a successful entrepreneurial network!
4- Franchisees benefit from lower expenses through volume buying. The power of purchasing inventory through a larger network helps franchisees with more opportunities to keep expenses down.
And, during a crisis of any kind, this can make a big difference in being able to stay competitive. Franchisees often also have the advantage of new technology and software provided by the franchise brand in order to track their purchasing and order more effectively.
5- Being part of a national franchise brand that provides name recognition. Even in hard times, name brands have the upper hand when it comes to attracting customers.
Franchise brands are known for consistency and quality, and that results in both national and local confidence in the product or service.
Successful franchisees know that while they have the support of a national brand, owning a business is hard work and demands a determined entrepreneurial spirit.
Each franchise brand has different requirements but in general, to run a successful franchise you need strong organizational and communications skills, plus a willingness to learn the business.
It’s also important to believe in and value the benefits of following a proven model and to embrace the existing system to guarantee the highest potential for success.
Even with the problems and struggles associated with Covid-19, and the ups and downs we all are facing going into 2021, franchising may still pose a great business to pursue, offering many more benefits to new business owners during tough times than any other entrepreneurial option.
There are many resources available to anyone considering opening a franchise business. Many franchise brands offer in-person discovery days where potential franchisees can learn about the business on-site after completing an extensive series of calls or online meetings to ensure they understand the business to best determine if it is right for them.
Another step to evaluate franchise opportunities is to speak to other franchisees who have opened businesses recently and ask them how they are doing and if there is anything they would do differently.
Franchisors are always happy and required per their Federal Disclosure Documents updated annually to provide lists of franchisees that potential franchise owner candidates can speak with.
Source: Forbes
