Almost every business, big and small, has been impacted in some way or the other by the Coronavirus pandemic, and the franchising space is no different. Sometimes a faulty business model causes a venture to fail. However, that isn’t the case in the current pandemic conditions.
Many companies and businesses that don’t provide essential services have been shut down. Those that have kept their shutters open are unable to make any profits. While these situations are temporary, the aftermath can be permanent. Many small and medium businesses that do not have any holding power may even be considering shutting down permanently. So what is going to happen to all of these businesses post-pandemic?
No matter which country we talk about, the economy would require commerce, and people everywhere need jobs. Franchise ownerships also make up a large portion of the business landscape.
Franchising is the preferred choice for many entrepreneurs. As per the Franchise Council of Australia, this is a $146bn sector offering over 1200 different franchise networks. The franchise sector in Australia employs over 500,000 people across more than 800,000 franchised businesses. This makes it a significant force in the country’s economy.
Becoming a franchisee is one of the best ways to start off on the right foot while embarking on your entrepreneurial journey. If you feel that you have the determination and dedication to run your own business but are struggling to think of an original concept, a franchise might be a good option for you.
It gives you a business opportunity with fewer risks, as it significantly reduces the unknowns and the numerous risks of starting from scratch. If you can zero-in on a franchise that meets all your requirements, you would be able to find the support you need to grow your business and turn it into a success.
So does all of this hold in the current pandemic situation as well, or are things different now? As mentioned earlier, the franchising industry has been as badly hit as any other in the wake of COVID-19. If you look at the statistics mentioned above, it is clear that franchise ownership is a significant part of commerce in Australia. It means that these businesses need to be up and running as soon as possible after the coronavirus threat has blown over.
If you take stock of the current situation and look at it objectively, it is entirely reasonable to expect that the franchising sector will transition into a buyers’ market. People that have financial means would find that there are plenty of opportunities for them to invest in a franchise. Some franchises may also be very eager to expand their network.
There would be specific franchise locations that were unable to endure the extended lockdown. If you take advantage of this opportunity, you would be able to acquire a business very quickly that only needs someone to jump-start it and set it in motion. If you have been considering moving into the franchising space, here are some pointers that can come in handy.
If you are quitting a 9-5 job to venture into the franchising space, there are certain things you need to keep in perspective. How did the job provide for you when you were self-distancing? Which specific benefits are you leaving behind? While you may not like your current job or may have lost one due to the lockdown, consider whether a franchise business is a right option for you.
While you may not have been physically affected by the pandemic, these situations can affect the psyche, leading you to make hasty decisions. But it’s crucial to be prudent, deliberate upon your plans, and maintain objectivity. Buying a franchise just because you think it would make you feel better is the wrong approach. You need to be logical and clear and make a smart decision.
There are certain standard factors you would consider while researching a franchisor even during regular times. But under the current circumstances, you would get a firsthand idea of how they tackle challenging and adverse situations. What strategies are they following to maintain some stability during the quarantine?
Is the franchise financially stable? What steps are they taking to help their franchisees? To get answers to these questions, you would need to connect with some of the existing franchisees before making your final decision.
The list of things you should be looking at and considering while buying a franchise in these times is quite extensive. Due deliberation is needed in various respects and some other things you should be looking at or conducting research on include:
Also, save up as much cash as you can. The current quarantine situation has given us all a taste of how things can go sideways without warning. We do not yet have a clear idea of how the masses will be spending their money once everything gets back to normal.
Australia has indeed fared far better in this pandemic than many other similarly advanced and sophisticated western countries. However, businesses of all shapes and sizes have been impacted severely in our nation too. The smart thing to do is to plan for the worst financially. You would need some amount of money upfront to buy a franchise business, and now is the time to do it if that’s the path you wish to take.
If you keep your eyes peeled and your ears open, you would be able to find excellent business opportunities in any economy. Investing in a franchise post-pandemic may very well be a good one. Take the time now to do your homework, and be well-prepared for any eventuality.
If you want to know anything more about what you need to check while buying a franchise business, please get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form, and one of our experts will contact you as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435