Franchising in 2009

What will the new year bring for franchise growth?
Talk about getting started on the wrong foot! Could everyone in the United States be in a more cautious and precarious situation then right now in the days soon after New Years 2009? Most people are still asking, "What just hit us?" as they try to collect themselves both financially and emotionally from a devastating 2008 where over 3 trillion dollars of wealth was lost throughout the year. My guess would be that my Holiday was similar to a lot of other professionals in the United States, less presents under the tree and much less extravagant all around.
Francorp works closely with virtually every major franchise system in the U.S. and around the world. The consulting firm continually analyzes the health and future of the franchise market to better serve and implement new franchise companies.
So what does 2009 bode for franchising? How will franchising respond to the inclimate financial times and what is sure to be an interesting road to recovery for the U.S. economy this coming year?
In my opinion, 2009 will be a good year for franchising and for many entrepreneurs getting started in their own franchised businesses. Here are the reasons.
1. There are no corporate jobs out there right now. Almost all of the large corporations in America save a few niche industries have made enormous cutbacks in their labor forces. When college educated professionals were coming out of school into the job market 3 years ago, those $100k jobs were plentiful and offered a very nice alternative for new workers. In the 2009 market finding a good job anywhere will be like winning a car from the monopoly game at McDonald's, not that likely. Franchises offer a valid alternative for those either newly out of school or looking for new opportunities. The absence of work opportunities will make franchise offers that much more attractive.
2. Real Estate Opportunities. Commercial Real Estate prices are at all time lows per square foot in most U.S. markets. When times are good and the Starbucks of the world are dishing out rents at $100 per square foot in Dekalb, Illinois, its impossible for the "little guys" to keep up. Today, if you have been living in a cave and haven't heard, Starbucks is closing 700 locations as well as many other major corporate chains. This leaves ample opportunities for smaller, emerging chains in many different business categories.
3. The Flock Mentality. Most people are pretty depressed right now. People tend to base their decisions on what others around them are doing or saying. Because of this mentality many of the "pretenders" in any given industry will not be participating in 2009 to the extent they would be when the economy is booming. Looking at the investment community, the really successful investors make opposite moves of the general public. During this massive sell-off in stocks during the second half of 2009, Warren Buffett invested over $20 Billion. The franchise companies that make aggressive expansion moves in 2009 will take market share from their competitors and be in extremely good positions when the economy comes out of this slump.
With the increasing numbers of unemployed workers in the United States franchisors have a growing audience and number of potential franchisees. As more and more creative finance tools are uncovered and the federal reserve does everything in its power to loosten the financial markets, the access to capital will begin to come easier. This combination stands to fuel franchise growth at unprecendented levels in 2009 and beyond.
Francorp is the world leader in franchise consulting and development. For more information and analysis on whether a business is suited for franchising, please visit our corporate site where a multitude of free information on franchising and franchise development is available.
Francorp was founded in 1976 and has worked with over 2,000 successful franchise systems from the ground up. Francorp has four separate companies, Francorp Consulting, Francorp Capital, Francorp International and Francorp Connect. The company was founded by Don Boroian who runs and operates Francorp's four companies to this day.
www.francorp.com