Franchise Wire:

Historically, franchising tends to perform better in a recession than other comparable, non franchised businesses. Opportunities are often created due to competitor failures, and because of the resilience of both franchisees and franchisors to seek out and exploit areas of the market which are less affected by a downturn in the economy than others.

Many existing franchised businesses are concentrating their marketing efforts on a different customer demographic than they were a couple of years ago. The grey pound is king in today’s economic climate, with over 70% of disposable income belonging to the over 50s. Also, the more wealthy in our society are either not feeling the pinch so much, or are better placed to weather the storm.

So, is there a product or service within the franchise offering which can be aimed specifically at the over 50s? Can you introduce more high value product to attract the wealthy consumer? Can you re-position your marketing message to appeal to areas of the market who can afford, and need your products or services?

There is no doubt that franchisee recruitment for most franchisors has suffered over the last few months. However, in previous recessions franchisors have in the main been able to recruit good numbers of franchisees. As unemployment rises, and more redundancies occur, more potential franchisees will enter the market with cash in the bank, looking for an opportunity to set themselves up in business. Granted, it is unlikely that we will see the sort of big payouts we saw in the early 1990s, but there will be significant numbers of people with enough funds to start a business, and with the skills required to be a franchisee.

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