The European economy has had to weather quite a few storms in 2022; post-Covid reopening, inflation, and the war in Ukraine.
And with the economic outlook uncertain for 2023 and beyond, businesses and industries across Europe have been facing up to the challenge, seeking ways to mitigate the impact of any potential downturn.
With some businesses and industries better placed to do so than others; here are five reasons why franchising is an area that can thrive during these times of economic uncertainty.
Recession Resilient
The franchise sector has been around a lot longer than you probably think. With several decades under it’s belt the sector has seen it’s fair share of ups and downs and economic upheavals - franchising remains strong today.
There is plenty of data online that will illustrate that despite any negative impacts on the economy, this is good news for you and your chosen franchise.
The franchises industry has faced tough global conditions in the past yet during the global recession and fallout from the banking crisis of 2008, many brands thrived, and other franchises emerged to meet new demands and are now amongst the most recognised brands out there.
Franchises don't emerge from the ether; they are products of innovation and survive through resilience.
The short-term economic outlook may be patchy but in the past the franchise industry has always been able to push through, and it will do so once again.
In Times of Uncertainty, People Turn to What They Trust
When money is tighter, people are less likely to take a risk on an unknown service. It seems like commons sense, right? Beit fast food, a cleaning service or business consultancy; when the push comes to shove, that you would turn to a brand you've heard of before as it feels less risky.
In essence, when resources are scarce, you are less likely to take a risk. And with franchises being some of the best-known brands in the world, it is more likely that you'll turn to franchises.
Thus, as a franchisee, your regular customers will likely remain loyal to you, while you may pick up new clients because new customers are seeking a brand they can trust.
Marketing Unlikely to Suffer
During times of uncertainty, in an attempt to cut expenditure, many small independent businesses have to sacrifice their less immediate needs. Thus, many independent operators are forced to slash their marketing and PR spends.
If you are a franchisee, it is to be expected that the franchise you are partnered with will want you and the brand to be successful, so the PR, marketing and advertising are likely to continue and may even become a greater priority.
Proven Franchise Models
You typically will not be the very first to buy into a proven model, at least one other has done this before you. This will undoubtably be the Franchisor, or early adopter franchisees, therefore; your own chance of success will have considerably increased, you just need to follow the system!
When investing in a franchise, typically you are buying into a proven franchise model and system, with all aspects of the operating system tried, tested and proven by the franchisor – they have already made the mistakes, so you don’t have to.
Franchisors have the ability to be more strategic about the future with a threat of a recession or economic downturn looming. In short, you can follow the franchisors system and not have to deal with this element alone, after all, franchising is about being in business for yourself, but not by yourself.
Recessions Don’t Last Forever
This is a big one. It is easy to be sucked into all the doom and gloom but remember, the economy will turn a corner at some point. If you have invested in a franchise for the right reasons, are aware of the positives and negatives, and built your very own solid business – just think how you and you’re your business will thrive afterwards.