Growing Your Franchise In Recession
Franchising or letting your business outlet to someone under your brand name and supervision isnt an old thing
. From McDonalds to educational institutions every one seems to be running in a race to expanding the number of their outlets. In the recessionary times however the growth of franchise has slowed at the best. This has happened due to the fact that the franchise owners havent taken enough into account the affect of recession on their ability to expand. This is a very sad thing as the business models need to be changed whenever they are met with new challenges. Lets get a glimpse of the things that need to be straightened.
First things first, costs are the most important factor. You as a franchiser have to make the whole package of your franchise offer a lot more lucrative if you want to see any hope of an investor being magnetized by your deals. Sometimes it is very difficult to think of things beyond the obvious. Franchisers need to get rid of their tight fisted ness. They need to compare the change in the payback periods (the period in which investors investment will be recovered). In recession even large businesses are amputated with cost cuttings and firings of important personnel. This gives the franchisers an opportunity as well as a threat at the same time. It is an opportunity in the sense that all the investors who cannot earn long term gains from investment into real estate and stock exchange are looking elsewhere. You might be thinking that they are not interested in the investments. But you are wrong here. The fact is that when an investor pulls out his investment, the investment sits like an idle duck without laying any eggs or you can say no returns. This means the investor is loosing the value of the money because of the currency translations and inflationary pressures.
Whats then the moral of the story? The moral of the story is that if you cant get an investor attracted into your franchise that means you arent intelligent enough to make a deal that best suits the prevalent investment environment. Think of investors as bacteria. Bacteria stop growing when you dont provide them an ideal environment. You have to lure in investment through special offers and discounts to new investors. If you are not willing to sacrifice on returns and are trying to put forth the same terms that you made for an economic boom scenario. Then your franchise expansion is doomed. All the franchisers should try to be reasonable and they should understand that the investment lying idle in the market will not only give their business a lot of boost but they will be on the shinier side of affairs once this heavy tide of deep economic depression is over.
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