Franchises Up and Coming?

While launching a new business or opening up a franchise may seem a formidible task in these tough times, conditions may just prove favorable. Browse any entreprenurial website or publication and you’ll see opportunities abound and despite everything, many franchises are growing.

When it comes to determining which franchises are the best investments of one’s resources, there are a slew of factors to consider, the most crucial being the viability of the business itself as well as market conditions. In a sea of advice for new entrepreneurs, one point consistently driven home is the sensible rationale of entering areas with proven track records. With investors wary and credit harder to come by, too much innovation tends to work against the entrepreneur seeking financial backing. In an article entitled, “Which businesses hold up well in a recession? (Msnbc.com March 26, 2008), Senior Producer John W. Schoen states, “One way to think about which businesses fac e the greatest risk is to ask: What products and services are people going to continue to buy even if there’s a recession?” Take the restaurant business which has plunged in the US along with the economy. But on a closer look, while people are spending less money eating out, consumer research shows that it’s the medium price range restaurants that are losing the most clientele. Many of their defectors have turned to the more convenient and cheaper fast food restaraunts, like McDonald’s. (AFN Thought for Food Oct 2008). Following the timely launch of the dollar meal, one MacDonald’s franchise in Oakbrook Ill, was reported to have 48 consecutive months of sales increases. So in addition to having a proven product, success is also a matter of timing and sensitivity to market conditions.

Given one has a good product in high demand, another factor to consider is of course the welfare of the franchisee. The Franchise Business Review presents yearly awards to the top 50 Franchises ranked in terms of franchisee satisfaction. Heaven’s Best, a carpet and upholstery cleaning franchise that’s been around since 1983, ranked number one in 2008 for its third year in a row. Providing a clean and “dry in one hour” process, the company prides itself on repeat customers resulting from its quality of service and excellent results. Heaven’s Best is praised by it franchisees for the marketing tools, equiptment, training and general support it provides. Seth Schoen of Brooklyn New York who has been operating his franchise since March of last year was kind enough to give me an interview.

Ho w did you decide to become a franchise owner?

I used to work for the city of New York as a Police Lieutenant. I wanted to work for myself and was looking for businesses on the Internet and found it. I also have a friend in Stanton Island who’s doing this.

What do you feel are some of the benefits of having your own franchise?

Being your own boss. For me it’s taking off when I want to take off, you know. I don’t have to answer up to anybody.

How has the recession affected your business?

Well you know, instead of people going out and buying new carpets and upholstery they want to have them cleaned. You hear it from people all the time.

What general advice could you give to a person wanting to open up a new franchise such as Heaven’s Best?

If you’re entering new territory you’ve got to build up the business. It takes time. You’ve got to give it time. When you’re opening up a new business, people need to know you’re out there. You’ve got to advertise.

What has been your most successful means of getting business?

We love repeat customers. It shows that they love our work, but you have to advertise through newspapers and the Internet. We tried once through cable TV but it wasn’t too effective. It didn’t reach many people and was costly. And of course, flyers on people’s doorsteps. Another thing we do is send out reminders to our customers about ten months after a visit.

One of the concerns that younger people have is the work-life balance, being able to have free time or time with family in addition to work. How does owning a franchise fit into this?

Well, there’s a lot of flexibility with this. If we have something scheduled, we don’t have to take jobs or we can schedule them for another time. And that’s what basically brought me into this. I like to travel. I travel a lot and we’ve got two kids and it just gives me the flexibility which I love.

That’s great. So can a person make a good living doing this?

Yes, but again, you’ve got to build it up, you know. You’ve got to let people know you’re out there. One good thing about this company is that doesn’t cost much to run it, which is a big factor.

Thank you, Seth.

As a final note demographics may play a part in the future growth of franchises. According to Steve Strass( USA Today) the babyboomers (age 55 to 64) are the fastest growing segment of enterpreneurs. Additionally, Generation Y, those born between 1978 and 2000 are highly independent and risk tolerant, thereby forming yet another wave of potential entrepreneurs. With the US unemployment rate at 7.2 percent, the highest in 16 years, many people are looking for alternatives. Franchises just may be the way to go.

Jude Pedersen

Jude is a freelance writer and editor residing in New York and can be reached at jude.steed@franchisespeak.com.