While tougher economic times may not seem like the best moment to
start a new venture, the reality is that franchises with a
successful brand stand as a possible exception.
The Canadian Franchise Association hosted a second franchise
exhibition in the Big Four Building in Calgary on the weekend of
February 6, 2016. According to organizers, the pre-registration and
attendance numbers showed a significantly stronger interest than in
2015 despite economic uncertainty in the country. The exhibition
features representatives from franchisors who have opportunities
available, expert consultations, and educational seminars aimed at
helping people who are interested in becoming a franchisee.
An expert attending the show said this trend wasn't surprising at
all. Spikes in interest in franchises commonly appear during an
economic downturn, with people gravitating toward franchises with
"recession-resistant" business models. These types of franchises
can show prospective franchisees that their franchisees have stayed
strong even when there are dips in the economy, and they typically
include restaurant chains and coffee shops.
Franchises that offer services to businesses, such as training or
accounting, also may stay strong during an economic downturn
because companies are often looking to cut costs and outsource.
While franchisees do pay a franchise fee and other start-up costs,
this arrangement allows them to start off with an established
business model and brand. Having a proven system and brand that is
recognizable to the public can reduce the risks associated with
starting a business from the ground up.
Mount Royal University Associate Professor of Business Wendelin
Fraser, points out that in a franchise, someone has already figured
out what has to happen to make the business run smoothly and
efficiently. When a franchise can demonstrate it has real value and
is solving problems for its target customer group, it can still be
a viable business opportunity even when the economy isn't
With layoffs a natural part of any economic troubles, it's not
surprising that so many people are looking for a solid business of
their own. When it comes to franchising, researching the business
model and franchiser itself carefully is one of the keys to
success, according to experts. They recommend prospective
franchisees have a completely clear understanding of what the total
investment is, know where they are getting the money from, and
identify their own skill sets before making a final decision and
signing an agreement.