Franchising and Recession Recovery
Joel Caws - Technical Director, Select Your Franchise
With the jury still out on when we might begin to see recovery from the recession, the immediate future still holds uncertainty for many. In a recession caused by a banking crisis, which some are likening to the great depression of the 1930’s, recovery could turn out to be a long arduous process.
While some might be sitting it out and taking a ‘proof is in the pudding’ approach, looking out for the positives, while retaining a sense of cautiousness is good business sense. Of course I don’t recommend throwing caution to the wind but some well-structured and informed research can lead to finding areas of growth despite the current economic climate.
Historically, franchise business models have performed well and even flourished in times of recession. This can be especially true where opportunities exist in the provision of necessity products and services.
Banks still appear more cautious than they were pre-recession, however they seem willing to lend funds where they can perceive a good level of security. Thanks to its track record, franchising does provides a level of security which banks look upon favourably and this can put a potential franchisee in good standing when it comes to obtaining finance to start up a new franchise business.
With no real light at the end of the tunnel for the current recession, many people are finding themselves squeezed financially or in a position of redundancy and may look to find new sources of income. For many, looking at a franchise opportunity as being a way forward can hold promise. However, as with any business investment, professional advice should be taken and proper research carried out. The old adage, ‘Look before you leap’ certainly applies here. With the British Franchise Association annual report showing that year on year, 90% of franchisees trading were trading profitably, now could be the time to consider a franchise as a way to get back on track.
Tags: franchise business, Franchise Finance, franchise opportunities, joel caws, recession, why start a franchise
