Why to invest in a franchise during uncertain economic times
As the UK begins the year on the brink of recession, the possibility of layoffs and other job losses will inevitably increase workers' desire to regain control of their livelihoods. Whilst starting your own business may be a clear way to restore control over your finances, many people will be concerned about the effects the economy's instability will have on their new venture.
There are no guarantees in business, but a franchise can offer a low-risk route to business ownership during challenging times thanks to the support of an established network, brand, and business model. There are numerous reasons to be optimistic that a well-managed franchise brand can weather the storm of impending recessions. Here, Justin Nihiser, CEO of the kids coding franchise, Code Ninjas, discusses why, when done correctly, franchising can be a great solution for any economy.
Understandably, launching a business in the current economic climate will be nerve-racking; sadly, no firm is totally recession-proof. Nevertheless, taking the route of business ownership through franchising allows you to go into business for yourself rather than by yourself. An independent business owner may feel isolated in their predicament when the going gets tough. As a franchisee, however, you have the advantage of a solid support system that can assist you in all areas of running your business, not just in difficult times. Due to the ongoing support a franchisee receives from the franchisor and wider franchisee network, franchises frequently have a greater success rate than independently owned businesses, regardless of market conditions.
Anyone looking to launch a business will unavoidably find it more challenging to secure funding during a recession. Lenders, however, look more favourably upon requests for money to support a franchise with a successful track record rather than an independent initiative, which can be perceived as carrying a higher risk. Since all of the costly and time-consuming mistakes and diversions have already been made, franchisees benefit from a tried and tested business model that can get them on the road to success right away.
Finding a franchise that is not only in your desired industry but is also established within it will ensure you have the best possible support whilst making a living by doing what you love. Established franchises often have strong brand recognition and a positive reputation, making it easier to attract customers and generate revenue. They will have dealt with a range of economic conditions throughout their existence and will have the expertise and knowledge to react quickly to evolving consumer purchasing trends. This expert knowledge and the backing of a reputable brand give franchisees a likely advantage over competitors in the market.
Although a significant percentage of the population has less disposable income nowadays, there are some commodities and services that people simply cannot live without. This means that if you do your research and select a franchise that operates in an industry that people consider as essential, there will be a market that you can tap into. The need for respectable and well-established coding education services for kids has grown exponentially as a result of the pandemic, when parents saw first-hand how screen time can give their children a rewarding and contemporary education. At Code Ninjas, our franchisees are successful because, despite financial constraints, parents continue to invest in possibilities that benefit their kids' professional and personal growth.
Investing in a franchise during uncertain economic times can offer security, stability, and support in starting and operating a successful business. By choosing a well-established and recognised brand, franchisees can minimise risk and maximise their chances of success. The franchisor's experience, support, and resources can help franchisees to navigate the ups and downs of the market, providing a solid foundation for success. If you are considering starting a business and are looking for a low-risk and high-reward opportunity, investing in a franchise may be the right choice for you.