"Last year, the U.S. experienced the perfect storm. Take a look at all the economic issues that seemed to come together all at once:
- The mortgage crisis
- High fuel prices
- Stock market woes
- Job losses
Plus, it was a presidential election year!
There was a direct impact on the franchise industry. Franchisors were affected in several different ways:
- The higher cost of goods
- Consumer belt-tightening
- Retail franchise upgrades were stymied by the lack of loan availability
- Smaller pool of prospective franchise candidates
Prospective franchisees were also affected in several ways:
- Significant household net worth decreases
- Challenging business start-up loan environment
- US political environment/elections
- Deepening recession fears
Now we have a new year. We have a new President. Do we have a new outlook?
According to The Reuters/University of Michigan Surveys of Consumers, US consumer confidence rose to a four month high. (However, it was still lower than economists predicted.)
Personally, my own outlook wavers it seems, day to day. Some days I feel that our now "flat" world is making everything more challenging. (No Mr. Columbus, the world is not flat in a literal way, but in a Friedman way.) Maybe because of technology, we know way too much about things that are happening globally, and it is just too much to deal with. It skews our decision making processes.
Other days, I feel energized by all of the fantastic people that I am now able to interact with, that I probably could have never interacted with before these electronic, social networks of ours started cranking up. I get energized by all the possibilities that now really do exist. There is so much opportunity for collaboration, and strategic partnering.
The last paragraph certainly included some great touchy-feely buzzwords, and hopefully a nice visual or two about how some of us can come together, and create new businesses, and new business models.
For those of you that want to get into a business of your own this year, but are not interested in coming up with the actual idea, the business model of franchising may be for you. Franchising can get you to market quickly, and efficiently. The "business in a box" concept of franchising is an attractive one on many levels. There is an operations manual, an infrastructure, technology, and sometimes even some good, old fashioned, branding.
As attractive as franchising may be to some, the business model of franchising doesnâ€™t come with "The Good Housekeeping Seal of Approval." Nor does it come with any guarantees. I have discussed franchise success and failure statistics here, before. (If you research the franchise you are interested correctly, it can do wonders in lowering your risk, though.)
With the amount of layoffs increasing, franchising will become a popular alternative to traditional employment. After all, who wants to keep getting downsized? But, will people be able to actually invest in a franchise of their own, this year?
The franchise industry could really use a break, and needs some help from the lending community, and the President. Let's open up the floodgates. Let's get the lenders lending again. Let's help those who really want a shot at the American Dream, go after their dreams.
The franchise industry is big enough to make a major positive impact on our nations' economy. Let's open for business.