Recession Proof Franchises : What is a Recession Proof Franchise?
Joel Caws - Technical Director, Select Your Franchise
Of late I have seen the phrase ‘Recession Proof Franchise’ going around. But what exactly is this? And is there such a thing? It would sound to be the perfect answer in the current economic climate if there was indeed a franchise that was truly ‘recession proof’.
I think a more accurate term would be ‘recession resilient franchise” since I have yet to come across a business that is full proof (though please let me know if you find one as I’ll be first in line! ) and in reality the responsibility falls on the operator of the business as to whether it succeeds or fails, whether franchised or not.
Types of franchise which fall in line with the term, ‘Recession resilient franchises’ are generally ‘must have’ services and product supplies. These types of franchise business weather the storm well since they are seen as non-optional or necessity type businesses as oppose to luxury products or services which may be nice to have but, when money is tight, are not necessary for living.
‘Must have’ type franchises usually fall into two categories: business-to-consumer and business-to-business:-
- Business to Consumer
These type of businesses cover, for example, essential home services such as plumbing repairs, essential household maintenance, cleaning services and the like. - Business to Business
Business to business covers, for example, business cost reduction and office cleaning services. These present good choices since their individual marketplaces can be what some are referring to as ‘recession proof’… or ‘recession resilient’ as i prefer to call it.
This doesn’t necessarily rule out franchise offerings which could be considered outside of this scope. There may of course be other types of business that don’t fit into the typical ‘must have’ services but appear to be fairing well in the recession because their offering is particularly desirable at this time. This is worth bearing in mind when doing your research so as not to miss out on what could currently be a good business opportunity.
Ultimately when choosing a franchise, one of the best gauges to how recession ‘proof’ or ‘resilient’ a franchise business is, is their existing franchisees. When considering a franchise, whether its claimed to be ‘recession proof’ or not, make sure you do your home work. Get a list of a few different franchisees from the franchisor of interest and take time to talk to them about how their franchise operation is bearing up in the light of the recession. This will give you valuable insight into how well the franchise is doing during what is one of the toughest times on record for businesses worldwide.
Tags: franchise, franchise opportunities, joel caws, recession, recession proof franchise
