Although it might not be a popular sentiment, we may want to be thankful for the economic downturn. There are some positives that have come from the downturn. In the United States people seem much more involved in politics, paying closer attention to our candidates, and government leaders. Enrollment in these types of courses has skyrocketed in colleges over the past few years. We have also seen more gas efficient and electric cars, a push for local manufacturing, and a streamlining of business practices, paying closer attention to costs. While many of these items are unrelated and some may not consider them all positive, it would seem with the pressure of the economy society was forced into action and to getting “involved.” We will likely see the results of these actions in years to come.
From a franchising perspective the downturn has helped franchisors with strong franchise infrastructures. Years ago, when the economy was rolling along, loans were abundant and equity lines were flush with ready cash; franchising was seeing a boom also. It was a sellers’ market, everyone wanted to use their newfound funds to build their American Dream. Many start-up franchisors with little or no training, infrastructure, or track record were growing quickly and quite frankly out of control. Although on paper the growth looked positive, it was not good for franchising. Many of these franchises failed and so did their franchisees. Many of the easy-to-come-by SBA loans were easy-to-default-upon and there were many businesses left to the franchise graveyard.
The franchises that found their way through the economy were rewarded with quality franchisees; those that researched and were diligent. The type of franchisees that didn’t join in on the faux gold rush but wisely invested their funds and are now in a position to partner with a solid franchise company. A franchise flush with detailed franchise operations, a comprehensive franchisee screening process, and having braved the economy; one that is stronger overall and built for the long-term.
So, as we finish up the summer of 2023, we might want to remember the old phrase, “that which doesn’t kill us only makes us stronger”!
