It has been said that when times are tough, the opportunistic types seem to crawl out from under their rocks. The upcoming months will feature plenty of them, I am sure....
Financially, the last quarter of 2008 isn't looking too pretty, as you must now know. Does that mean that all of our banks are all going to fail, the Dow will be at 5000, and unemployment will reach 15%? Probably not. But this ride could be rather uncomfortable. {Joel, tell me something I don't know}
The great thing about our economy is that we have a bit of history on our side. History shows us that the markets always come back, and they usually set new records when they do. Patience. Patience.
Businesses will continue to be bought and sold, and people just like you will still open businesses of their own. That is because it is really part of the American dream.
The biggest issue that I think future franchise owners will face in the coming months is trying to figure out who to believe, and who to run from, when it comes to selecting and buying a franchise.
When it comes to actually selecting a franchise, one way you can find one is by using "Franchise Directories." These can be found online. Here is one example. Here are some that I recently reviewed as part of my monthly article on Small Business Trends.
As franchise companies feel the pinch of a down economy, and with it maybe a lot less prospective franchise owners contacting them for information about their concepts, their advertising may get a little more aggressive. I recently saw an example of this from a franchise company that I believe was out of Texas. On their online "landing page" , were the words, "Turn this into a million dollar business of your own," or something like that.
Franchise companies are not supposed to say stuff like that. It could be construed as an "earnings claim." Another words, if you were to invest in that franchise, and did not do a million bucks in sales, then they must have been lying. Lawsuit. You would most likely win.
In summation, be very wary of any franchise companies marketing materials that make statements like that. {If you have some specific examples, please share them in the form of a comment.}
Another way to find a franchise is by working with someone like me. A franchise consultant/broker. I work with folks that want to look seriously at their franchise ownership options. Go here for more specifics. My service is free.
Just like in any industry, some franchise consultants or brokers are better than others. Some do a hard sell. Some work long distance via phone, and online. Some lease offices, and have face to face consultations. Some are brand new, and some are more seasoned. I wrote a somewhat controversial article called "The 10 Questions {Plus 3} To Ask A Franchise Consultant/Broker." I say it was controversial only because some of my competitors that don't work in their local markets like me, didn't appreciate my suggestions in that article. {See for yourself by reading it.}
If you had a choice, would you rather work with an experienced franchise expert who came from the franchise industry and who has an office and works locally, or would you rather work with someone via phone, whom you never meet, and who most likely doesn't know your local area enough to make intelligent suggestions for franchises that would work there.
With these really uncertain economic times, I feel even more strongly about my suggestion of working with local professionals that know your area, care about your area, and have some skin in the game. {It is their area too!}
There will probably be some brand new franchise brokers in your area. Just like you probably wouldn't feel too comfortable investing your money with a brand new financial planner, working with a franchise consultant/broker with less than 2 years of documented successful placements locally, could be pretty darn risky. But...it is your money.
Finally, I suggest that you take things a little more slowly than you normally would, when making your decision to purchase a franchise of your own. It will probably still be there if you take an extra couple of weeks to do the proper research, and make your decision. Best of luck!
{I recently discussed this topic on The Daily Franchise Show.}
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