When the dollar’s up, we’re all happy. There’s money floating around and people don’t mind buying the things they don’t necessarily need. Spending on food, music, and expensive clothing isn’t taboo – when the economy is healthy.

During this time, you’ll find all sorts of new businesses opening as well. During the past few years, we’ve seen an explosion in vending franchises, dog grooming salons, and even dryer vent cleaning businesses.

But if the economy were to take an unexpected hit like it did back in 2008, all those “frilly” franchises would fall to the wayside. When lending becomes tight, you’ll see less and less new franchises open and more and more existing ones close. It’s a simple matter of economics and supply and demand.

The key to owning a successful franchise is owning one that can withstand economic shifts.

FOUNDATIONS FOR SUCCESS

If you’re considering opening a franchise, here are a couple of points to take into consideration:

Demand

The first thing you have to be certain of is the demand for your industry. Is the franchise you’re interested in one that people will need, even when times are tough? Those movie boxes outside the grocery store? Are not a necessity and could suffer if the economy shifts south.

This is why the education field is an excellent investment. No matter how tough times get, parents will always find a way to help their children. It may mean going out to dinner less. It may mean tightening the purse strings in other areas. But one thing’s sure, they’ll not let their children fall behind or struggle.

Overhead

Next is overhead. How much does it cost to start and run your franchise? That’s the reason many concept restaurants fail during a recession: High costs to open and maintain. And while people will always go out to eat, they’ll eat in wallet-friendly establishments, leaving the high-end chains no choice but to close until things get better again.

Low overhead means you’re investing less of your own money and keeping more profits, even when money-flow is a little restricted.

Innovation

The last thing you need to consider is innovation. How innovative is the franchise you want to open? Do they allow you the freedom to shift and flow with the consumer landscape so you can come up with new and effective ways to run your business?

For example, La Salsarita in Detroit, Michigan survived the 2008 downturn because the franchisee came up with ways to survive without cutting, slicing, and dicing his customer experience, like many of his competitors did, leaving him the last man standing (and making money) in the food court when all others locked their doors, permanently.

RESIST RECESSION

A recession is an ugly thing for all of us, but it’s not an excuse not to open a low-overhead, in-demand franchise that will allow you to buffer your own personal financial journey and keep you in the black when others are clawing their way out of the red.

Recession-resistant Franchises

1. Fast food. Unlike concept, sit-down style restaurants, they have a lower overhead and usually offer lower prices for what looks like more food. People will always eat fast and cheap. (Beware, the startup costs of these stores tends to get a little pricey, though).
   

2. Care. Moms are working at home now and childcare is becoming another important factor in their lives. And so is parent care. As the older generation grows into retirement, more people are finding ways to have their parents tended to at home, rather than sending them away to an expensive, and often poorly-supervised, care facility.
   

3. Education. There’s one thing parents will always put their money in: education. Everyone wants to see children succeed and quality education will always bolster that. The difference between education franchises, though, makes a difference in the rate of success. Does your education franchise cater to them or force them to bend to you? 

Tutor Doctor caters to the parents, making their lives easier. But more importantly, it makes their lives of their children easier and more rewarding. Contact us today to find out more about starting your own low-overhead, in-demand franchise.