Never Alone: Franchisees Get The Benefits of Working For Themselves

Never Alone  |  Franchisees get the benefits of working for themselves – with the backing of business experts  |

Published in the March/April 2013 issue of print Search & Employ®  |

All you have to do is drive by a typical strip mall to see how franchises are taking over the American marketplace. The traditional “mom-and pop” stores, shops, and restaurants that used to dominate the scene have largely given way to a tremendous variety of franchises – just about every occupation has a franchise tied to it somewhere.

But this doesn’t mean that big franchisor corporations are putting the moms and pops out of business. Franchises are actually run by people just like the moms and pops who used to own of “Roger’s Hardware” and “Betty’s Hobby Shop.” And today’s moms and pops have the backing of franchisors that have already established successful operations.

There is an old saying about franchising – “In franchising you’re in business for yourself, but never by yourself.” Franchising lets people own their own businesses, and it gives them the backing of larger organizations when it comes to such matters as marketing and getting deals from suppliers. And there are plenty of other advantages to be being a franchisee: learning how to start a business from the ground up; the use of established, recognized brands; training; ongoing advice and counseling; and assistance with business systems.

No time like the present

While the economy is slowly improving, it’s still not back to the pre-recession glory days when it seemed that every business was minting money. So it might seem that this isn’t the best time to start a franchise. However, small businesses – including franchises – actually increase in number during periods of weak economic activity. When people lose their jobs with large companies and cannot quickly find similar jobs, they often decide to go into business for themselves.

Even better, it is no longer considered a step backward to go from a big corporation to a small business. In fact, some corporations view small business experience as a plus because small business owners must focus on cash flow, cost containment, customer retention, and overall survival—all of which are also important to the corporations.

And the costs of starting and maintaining a small business – especially a franchise – are significantly lower than in previous recessions. Costs associated with computers, Internet access, commercial real estate, and office equipment have dropped. Over the past two years, modest improvements have occurred in small-business lending.

On the flip side, starting any business comes with a certain level of risk. But franchisees can do quite well. According to the International Franchise Association (IFA), only 10 to 12 percent of all retail and service enterprises are franchises, yet the franchises account for more than 50 percent of the revenues of those enterprises. This means that, even though franchises are actually outnumbered in the retail and service sectors, they bring in most of the money.

Furthermore, in late 2012, the IFA forecast that franchising would grow by 2 percent in 2013. The IFA said that franchising would add 162,000 new jobs and more than 10,000 new franchise businesses. The IFA based its forecasts on research conducted by IHS Global Insight, a market and economic information firm based in Englewood, Colorado.

According to “The Franchise Business Economic Outlook,” prepared by IHS with the IFA, commercial and residential services – including construction – will be the growth leader in 2013. Those services will grow by 2.8 percent, up from 1.7 percent in 2012; the number of jobs will rise from 346,822 to 356,533 jobs (9,711 new jobs). Other sectors that are expected to show employment growth above the overall franchise average of 2 percent are:

*  business services, up 2.6 percent from 909,329 to 932,329 jobs (23,643 new jobs)

*  restaurant and food service, including both quick-service and full-service restaurants, up 2.2 percent from 4,050,922 to 4,140,042 jobs (89,120 new jobs)

About the Author

This article was written by Jay Myers