If you’ve been thinking about franchising your business, now could be the perfect time to take the plunge. Businesses that are fortunate enough to be operating as normal despite the COVID-19 crisis could play a key role in boosting our economy. Here’s how you can become a franchisor and boost the economy during the COVID-19 crisis.
The COVID-19 pandemic has affected companies across many sectors, so now might not seem like the best time to be franchising your business. But a few sectors, like technology and healthcare for example, have actually seen a huge uptick in business. Others have seen steady levels of demand that, thankfully, haven’t been badly affected by the crisis. Some have even adapted the way they work so they can continue to trade, even when the world is in such an unusual state.
If you fall into one of those categories, now could actually be the perfect time to roll out your franchise package. You could expand your business, give unemployed people the chance to become entrepreneurs and help stimulate the country’s economy back to health. Don’t know where to begin? Here’s a guide to franchising your business, whether you’re in exceptional circumstances or not.
How do I franchise my business?
Franchising your business might sound complicated, but it can be a relatively straightforward process. You should already have many of the resources that your franchisees will need, like a business plan, operational guidelines and a marketing strategy, as you will have planned everything out at the start of your business journey. If you’ve already expanded with another company-owned location, you’ll also know your business concept can work without you, as your staff likely handle much of the day-to-day running.
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We’ve got plenty of information about how to franchise your business, whether you’re a total newbie to the franchising world or have previous experience as a franchisee. Check out the 7 steps you must take to franchise your business – it’s a handy resource that breaks down the process of setting up a franchise into simple steps. If you need some more convincing, here are 8 reasons why you should franchise your business.
Why should I franchise my business now?
It’s a very unpredictable time for business owners across the globe, so it’s understandable that many aren’t keen to make any risky moves. However, you’d be surprised how safe of a bet a franchise is. According to the bfa NatWest survey in 2018, less than one percent of franchises in the UK close due to commercial failure. Many of the world’s biggest franchises are also operating in highly recession-proof sectors, like home care franchises and food franchises.
Now could be a fantastic time to give budding entrepreneurs across the country the chance to start a business. Many ambitious people have been made redundant and don’t want to return to the drudgery of employment. They may use this unexpected situation as a sign that it’s time to invest in a franchise. Of course, franchises that have continued to perform well through international lockdowns will be at the top of most people’s list. Your business model could be a highly appealing prospect to people seeking a new career path in this uncertain world.
Which sectors are recession proof?
Not sure if your business is recession proof? Data from past recessions can tell us which sectors are likely to survive the current financial downturn and thrive through a longer recession. Investopedia analysed the only 25 companies to report positive returns on their stocks out of the whole S&P 500 – essentially a list of the largest stock market companies in the US, adjusted by the number of shares available for trading.
It found that the company which enjoyed the most impressive growth was Dollar General, a discount store with branches across the country. Other big winners were established franchises like McDonalds and other inexpensive food retailers like Walmart. Freight and shipping franchises and companies also survived the recession well, as moving goods across the country remained essential.
And back home, there are plenty of essential service providers that will always be around, regardless of the economic climate. For example, home care franchises will always have a steady customer base, as the elderly or vulnerable people they look after cannot just start fending for themselves. Similarly, automotive franchises are likely to resist a downturn (particularly in our current situation, where people are being encouraged to avoid public transport). Many people rely on cars for work, so there will always be plenty of need for garages and cheaper repair options.
This is only a very broad guide and, of course, the current situation we’re in is very different from the 2008 recession. It’s impossible to say with any certainty which industries will be worst affected, and no business is 100% recession proof. However, you probably already know if your business is going to bear the brunt of this crisis, as your income will have already significantly reduced. If you’re still trading normally, or have only seen a small drop in business, your business could be more recession proof than you think.
Planning for the future
Risk-averse business owners might not want to roll out their franchising package just now, but you can still make the most of this unusual situation. If your business is quiet right now, you could use this time to plan how you’re going to begin franchising once things return to normal.
Of course, this situation is causing untold financial stress for business owners up and down the country, so it’s completely understandable if all you can do right now is make sure your company survives. But if your operations are relatively stable, and you’ve got a bit more free time on your hands, make the most of it. Begin drafting your franchise agreement, speak to a lawyer and accountant about how you can prepare to welcome franchisees and consult trusted industry bodies like the bfa to identify your next steps.
>> Read more:
- 5 Qualities of a Successful Franchisor
- Franchisor and Franchisee: The Importance of a Strong Relationship
- 5 Ways to Keep on Learning as a Franchisor
- Top 5 Mistakes To Avoid Making As A Franchisor
- What It Really Means To Be a Franchisor
- Ten Ways to Be the Best Franchisor a Franchisee Could Wish For
- Why it’s Important for Franchisors to Visit Franchisees.
The next steps
It’s a strange time for us all at the moment. Whether you want to take the plunge and start welcoming franchisees, or would rather use this time to fully develop your franchise package, this could be the push you need to turn your successful business into a franchise.
We’ve got plenty of articles that you can read if you want to learn more about franchising. You can check out everything from 9 must-read books for business owners to our tips for staying positive and being supportive during the COVID-19 crisis. Or, if you’re looking to join a franchise, check out our UK franchise directory.
Sophie Cole, Point Franchise ©