bad_economyAnyone in business knows that for the past few years, the economy has been seeming to grow more and more unsure- and that can make many people feel a bit leery of investing, or starting up a new business. In tandem with these stories, there are also signs that point to franchising still going strong and in some cases, really becoming more profitable. In recent years, that International Franchise Association, or the IFA has actually reported some surprising trends in growth and profit amongst franchisees, and there may be some good reasons for this. However, one thing is very sure, across the board- in a down economy, franchising is probably a more stable investment than an independent business.

There have been a few reasons that some people believe that franchising may be booming where other businesses are finding it either hard to stay open, or closing their doors all together. For one thing, franchises really cross a wide terrain of financial income levels for start up. From a small home based business franchise which may only take a couple of hundred dollars to start up, to a mega million dollar earner like McDonald’s, there is a franchise out there with a start up that most people can afford. In addition to that, there is a franchise out there for every interest or passion. Not only that, most of these bring about their own training and start up can generally be very quick, making it a much faster road to seeing a profit than other investments. Sometimes, because franchising is based on brand recognition it is easier to obtain start up financing- often this is because the banks and lenders already have a relationship with the franchiser, but sometimes it is based on name.

Also, another benefit of franchising is, it’s pretty easy to take a look around and see if you could be successful in a chosen business venture. Through different research methods, or even just talking to other franchisees- projections on profits and the like are easier to obtain. This makes franchising a more stable option as it is less risky- knowing that you are investing in something that is already successful versus hoping for that success makes it a much less intimidating investment. Many people want to strike out on their own and they want to become self employed- but it’s rightfully so, an intimidating thing- with franchising, there is that knowledge of a proven system of business, coupled with a parent company and other franchisees. The template is already there, so to speak and that often makes people feel much more at ease with franchising, and it can help a great deal. It doesn’t hurt that with most franchises, the business, down to the buildings in some cases- is usually up, running and already turning a profit in the start up days.

Franchising tends to hold its own in a down economy because it does afford a certain level of stability that independent business can’t- it’s not all that different from investing in independent business, the same hard work is needed, however, franchising offers a bit more support and guidance.