Canadian Franchise Development Trends in Uncertain Times

When something as unprecedented as the COVID-19 happens, it has an impact on multiple areas of life. So, as a prospective franchisee, it's definitely worth taking the time to see how the pandemic has impacted the franchise industry as a whole and what this may mean for everyone involved in the future.
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New categories drawing strong interest

As expected, there are some new winners emerging based on the shifts in consumer habits and the perceptions of franchisees when it comes to recession resilience. While research shows that the interest from prospective buyers in franchising still remains strong, their attention has shifted. The pet category, for example, is now seeing more interest because people are perceiving their services as essential. Other areas that are becoming increasingly popular among potential franchisees include education, business services, financial services, cleaning and computer services.
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Models are starting to change

With lending tightening and leases looking very unappealing to potential franchisees right now, brands that have lower perceived risk are becoming increasingly appealing. It's too early to say just what the outcome will be, but it's already clear that more brands are going to add mobile options and offer more accessible entry models, such as reduced franchise fees.
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Momentum is dwindling for some brands

As franchisors have had to cut back to conserve cash, many laid off marketing and sales teams. This will make it tougher for these brands to rebuild their momentum. It does, however, create an opportunity for brands focused on handling lead generation for other businesses, marketing consultants, franchise development consultants and franchise brokers.

One thing to keep in mind is that this pandemic may mask some weaker franchise models. A brand with the outward appearance of health could, in fact, be struggling on the inside. If a brand struggled to get units open pre-pandemic, had unit agreements fall through, had high levels of owner turnover and unit closures or poor satisfaction scores from customers, it's a sign that there are problems behind the scenes. However, with the pandemic effectively putting many things on pause, these same franchisors could now have a plan in place to correct whatever is ailing their system. If you noticed some or all of these signs in the brand you're considering prior to the pandemic, this is an area where deeper research will be needed before you make a final decision.
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