Challenges of Growing Franchise Chains in a Weak Economy

A year ago, this article had even more relevance than it does today, but then again, I am being optimistic here, not factual. While we have seen the worst recession of all time come and hopefully fade, we have not recovered totally as yet. The environment for selling franchises during the better parts of 2008 and 2009 was not very good, to say the least. However, having said that, I see a light at the end of the proverbial tunnel. Clients of mine are actually doing deals and have been doing so during what is traditionally the slowest time for franchise sales, Thanksgiving through New Years.

I am encouraged by what many are now seeing, although not all of my clients are seeing this sales uptick. The bigger box companies still face the challenge of trying to find financing for their prospects, but the good news is, there are prospects.

Marketing efforts have changed somewhat, attendance at trade shows is down, but the Internet continues to be the place to find leads. I have seen clients go the direct mail route by obtaining lists of prospective franchisees who would be the right fit for their brand. Webinars being conducted by franchisors are really catching on and will continue to be a viable marketing tool. Trying to involve your existing franchisees in the sales process might be viable for some brands but not for others.

All in all, I see 2010 as a year for recovery and growth in the franchising business.