The Future of Franchising
As we stand, by all accounts, on the brink of a new dawn for business welfare and the economy at large, franchising is continuing to prove its credentials as a way to take full advantage of the improving economic scene. Nick Williams gives readers the exclusive benefit of his experience on why now is the ideal time to look seriously at franchising.
So here we are at the point of an upturn,” says Nick. It is obvious that the Franchise Development Services (FDS) Consultant of 13 years can see the light at the end of the fiscal tunnel. “There seems to be now growing anecdotal and concrete evidence that people are gaining in confidence, that people are taking steps that were previously in the backs of their minds.
“We are seeing would-be franchisors coming to the market, where 12 months ago we weren’t seeing them.”
FDS’ reports are an incomparable thermometer of the temperature of the industry as the business continues to operate at the forefront of franchise activity. “Many non-franchised businesses that have managed to survive the past four, five, six years have had whatever cash assets they have severely depleted. Most have had to slim down on their resources in terms of HR,” Nick continues. “So now if you have a half decent business and you want to grow it, what are you going to do? Your cash reserves have probably been eaten into and you have likely got the management team down as thin as it can go. However, you have a good idea, a good product or a good brand. You know that demand is going to build up and you need to act on that. The best way must be franchising.”
Franchising just before a strong escalation in economic fortunes has proved a masterstroke for businesses in the past, with many of today’s most successful franchises having chosen exactly the right time to begin franchising their businesses. Nick adds: “The banks are starting to free up financing and you will have access to people who are becoming more confident. The scene is set, I believe, for a revival.
“We are likely to see even more companies coming to us, getting themselves in a position to respond to increased consumer demand.”
The increased consumer demand that will boost businesses almost universally will ensure that companies that have survived the recession, are well placed to become powerful forces in the franchise industry in the near future. However some companies that have survived and that will continue to prosper, are firms with an enduring demand for their services. “Loosely speaking, I would say businesses that are recession-resistant are in the domiciliary care sector and those providing valuable essential services, because there is an absolutely mandatory demand for their offering. Then, too, there are quality brands, in any niche, which will always stand out – even in the challenging times we are emerging from.
“Statistics show that 95 per cent of business that started from scratch four or five years ago have gone under, whereas the reverse is true in franchising. Franchise owners are following someone else’s successful business model.”
Franchising allows businesses with a tangible profit margin to expand rapidly and securely across a large geographical area, and, as Nick reiterates, timing is everything: “I think now is a good time to invest in a change of direction, of course ideally franchising. This moment in time has not been uniquely carved out for franchise owners; it is an opportunity for anybody.
“But it is an opportunity, therefore, for anybody who wants to go into business to put their future in the hands of people who know how to survive through downtimes as well as uptimes. Its easy to make money in the uptimes, but its whether you can survive in the downtimes that really sets apart the men from the boys.”