During tenuous economic times, the franchise industry offers a host of businesses that thrive during a recession to reduce risk and ensure success for business owners.
The most recent economic downturn was triggered by the pandemic last spring, and certain industries saw their businesses fall into a tailspin. But recession-proof businesses, such as certain industries in franchising, offer multiple revenue streams and the ability to appeal to a diverse customer base. Now, further propelled by the vaccine rollout and more economic relief from the new administration in Washington, D.C., franchising is slated to recoup losses by the end of 2021. As such, the franchise industry is forecasted to open 26,000 new businesses in 2021 and 800,000 new jobs, IFA’s annual Economic Outlook for Franchising revealed.
Some businesses continued to drive sales even during the pandemic when the economy was on the rocks. While restaurants, travel, and hospitality providers suffered sales declines during the pandemic, businesses in the home services sector, cleaning providers, telehealth and delivery services thrived. Franchising can provide recession-resistant opportunities and set entrepreneurs on a path for success. Investing in a franchise model gives business owners the chance to be in business for themselves, but not by themselves as it provides entrepreneurs with national branding efforts, turnkey local marketing campaigns, lead generation strategies and training.
As you conduct research on a recession-resistant franchise, make sure to learn steps you can take to ensure this new venture will flourish during future economic downturns.
Qualities of a Recession-Proof Business
Recession-proof businesses provide essential goods and services people need even when budgets shrink. The new normal is posing a new set of recession proof guidelines and it’s important to consider if the franchise is offering a service that is relevant during unique times. Consider whether their services have been in high demand despite business closures. It’s also important to see how the franchise is adapting to current events. Perform research to make sure the franchise you are contemplating provided innovative solutions to support its franchises in 2020.
Here are some franchise options that have been able to withstand fluctuations in the market.
- Provides consumer essentials. Industries that provide an essential good or service are less likely to struggle during tough economic times. Mechanics, healthcare providers, liquor stores, delivery services, groceries, and home services thrived in 2020, according to the U.S. Chamber of Commerce.
- Americans invest in affordable luxuries. With vacations off the table in 2020, savings accounts for many Americans were at record highs. The personal savings rate rose to 13.7 percent at the end of December, up from 8 percent prior to the outbreak of the pandemic, the Wall Street Journal reported. Limited travel options and flush savings accounts are allowing Americans to purchase affordable luxuries, like gourmet coffee and high-end ice cream.
- Restoration Services. The weather doesn’t take a break when the economy is in rough shape. Homeowners will still have to deal with pipes bursting, fires, and weather damage, even when the stock market is performing subpar. Since home restoration services typically are not optional, the need for quality providers will stay in high demand regardless of the economy.
- Americans tackle home improvement. During a recession, many people stop spending money on extravagant vacations and other big-ticket items, but they are still willing to invest in home improvement projects. Staycations mean there is more money in the bank to make their homes shine.
Home Improvement Industry Soars in 2020
As Americans spent more time working from home and sheltering in place, many took the extra time to tackle home-improvement projects and repairs they had neglected. American homeowners spent a median amount of $17,140 on improving their homes since the pandemic began in 2020, according to a survey conducted by Porch.com, an online home improvement resource. More than 3 out of 4 American families conducted a home project during 2020. At least 59 percent of American homeowners said spending more time inside due to restrictions inspired them to make home improvements. In addition to bolstering technology and renovating bathrooms, at least 24 percent of Americans spiffed up their homes by giving it a paint job.
Fresh Coat’s a Turn-Key Franchise Solution
Fresh Coat offers a recession-proof franchise solution with a low investment and low overhead. Not only are American homeowners making home improvements during this unique time, but businesses also took advantage of office closures to make improvements they had postponed. An important part of any Fresh Coat franchisee’s business are commercial accounts. We support our franchisees by providing commercial leads and quoting support cost-free from the home office. Fresh Coat ensures it will weather a recession by providing multiple profit centers and an operations system that maximizes revenue.
Fresh Coat specializes in interior painting, wallpaper removal, popcorn ceiling removal, exterior painting, cabinet and deck staining, pressure washing, and other home improvement services. Fresh Coat uses proprietary software to help provide quotes, generate leads, and offer customer service. Additionally, having a robust commercial business ensures profitability and offers a stable revenue stream year-round.
“I did a lot of research to find the right franchise. I looked at several different ones and just looking at painting in general just seemed to be a little bit more recession proof,” said Alex DeLeon, a Fresh Coats franchisee.
Could Fresh Coat be the recession- resistant business opportunity for you? Click here to request an e-brochure about what it takes to start a Fresh Coat franchise.