While you can’t control the economy, you can control what business you open. Recession-resistant franchises can thrive and adapt easier than other businesses during economic slumps.
So, how do you find a franchise opportunity that is less volatile in a recession? Here are the signs you should look for that hint at a strong recession-resistant franchise.
The Product or Service is a Necessity
When money becomes tight, people cut out the “luxuries.” That typically includes entertainment, clothing, and travel. Meanwhile, businesses that perform specialized services or provide necessary products, like food, do well during tough economic times. Those businesses include repair services for cars, plumbing, roofing or HVAC systems, in-home senior care, grocery and convenience stores, hair salons, or restoration services.
- Repair Services: Cars and air conditioning units break without warning, no matter the state of the economy. In tough times people will repair their necessities over buying a new one. This factor makes repair services like auto repair shops, home appliance mechanics, or HVAC maintenance providers stay strong during a recession.
- In-Home Senior Care: 10,000 people turn 65 every day in the U.S. Many seniors are now looking to age in their homes over some facility or community. They will need constant care, making non-medical in-home senior care companies, like A Place At Home, fare better during uncertain economic times.
- Grocery & Convenience Stores: Food is a necessity. While people might cut back on eating out at restaurants on a tight budget, they’ll still do their grocery shopping, making grocery stores a great business investment during tough economic times.
- Hair Salons: Hair is constantly growing, and unless you’re looking to become Rapunzel, you’ll need a haircut. Nearly 60 million Americans had four or more haircuts in a six-month period last year.
- Restoration Services: A home catches on fire, or a basement floods after a rainstorm. Neither are events homeowners plan for. So, once the smoke clears and the water recedes, a professional must restore the property to its original state. This service needs to happen almost immediately.
Financial Strength
When studying franchises to buy into, closely analyze their Franchise Disclosure Document (FDD). This document will give you a clear understanding of their financial state. Asking an accountant and lawyer to help review the numbers is also a good idea. It will include information on any bankruptcy claims, the past financial performance of the franchise system, and audited financial statements.
A Proven System
During your exploration of recession-resilient franchises, spend time scrutinizing their system and whether it has a history of building successful franchisees. Does their approach work in various demographics in all parts of the country? When speaking with franchisees during Validation, ask them whether they felt their training and support were worth their investment costs.
Growing, But Stable Demand
A key to recession-resistant franchises is they are in industries that are seeing a rise in need but also have a sustainable demand. For example, the demand for senior home care is skyrocketing. On top of that, the elderly population will grow exponentially for the next decade, creating sustainable demand for the industry.
Also, consider whether it’s a year-round or a seasonal business. Year-round demand allows you more opportunities to bring in revenue than a seasonal business, like lawn care. Whereas no matter the weather outside or the state of the economy, thousands of seniors need in-home care daily.
Make Yourself Recession-Resistant with A Place At Home
With an A Place At Home franchise, your revenue isn’t only coming from in-home care. We offer services for every phase of the aging journey, from non-medical in-home care to coordinating care between providers and ultimately finding a senior living facility. But our home care revenue services don’t stop there. We help senior living communities maintain compliance by finding staffing solutions for them.
In 10 years, we have built a location-tested model to help our franchisees thrive. Our first locations are now doing over $1 million in sales. We’ve provided care to over 4,217 individuals and employed 4,566 caregivers. Help us expand our compassionate reach across the country while we help you build a promising business no matter the economic state. Start today by filling out this form and one of our representatives will be in touch.