Franchises that Thrive During Tough Economic Times

Written by Whitaker Stacey

If you’ve been looking into purchasing a franchise, the current economic climate might have you thinking otherwise. If you make a smart choice, however, you can still have that thriving business you’ve always dreamed about—even during a recession. There are certain business niches that have proven themselves to be virtually recession-proof. These are the ones you want to consider if you are concerned about making a profit in a drooping economy.

Child Care

You might be thinking that fewer people will be using child care services now since so many jobs have been lost, but there is another side to this equation as well. There are many more workers who are worried about losing their jobs than there are those who have been laid off. It stands to reason that these individuals who are worried about their job security may encourage their spouse to go back to work sooner after having a baby, or even begin a new career to help contribute to the volume and security of the family budget. With both parents working, someone has to look after the kids, and that’s where child care franchises come in.

Salons

The salon industry is another industry which tends to boom or at least stay on level footing during tough economic times. You would think getting a new hairstyle or a manicure would be one of the first things to go, but recessions are depressing, and there’s something about pampering yourself that lifts the spirits. Not to mention, there are more people on the job hunt, and candidates know that they need to look sharp in order to stand out to potential employees.

Cleaning Services

The cleaning industry wins the “sweep”-stakes when it comes to recession-proof franchises. A clean environment is a necessity when it comes to one’s sanity, and with more people working more than one job to make ends meet, they may splurge on a residential cleaning service to do the chores that there just doesn’t seem to be time to do themselves. Commercial cleaning is also a thriving niche during a recession. As companies increase their customer service efforts in order to remain competitive, there will be a focus on maintaining a clean and pleasant environment that will attract customers.

Tax Preparation Companies

As long as the IRS exists, tax preparation will be a necessity. Many people are intimidated by the process or have complex financial situations which require an experienced tax preparer. In addition, these franchises often lure customers in by promising them an increased return that can only be accomplished by an expert.

Low-End Goods and Services

As people strive to buckle their belts during the recession, they may begin sacrificing by turning to discount stores, fast food restaurants, consignment shops, and other companies that offer low-end goods and services to save money while maintaining some semblance of their standard of living. Essentially any franchise that offers a way for the average consumer to minimize their basic living expenses will be a popular one during a recession.

Insurance-Reliant Businesses

Any business that profits off of insurance companies, not individual consumers, will likely find themselves on solid ground during an economic dip. Because buyers do not have to come out of pocket to pay for these goods and services, they will not be deterred from having their car or roof repaired, for instance.

Pleasure or Escape-Oriented Goods and Services

Difficult economic times can be anxiety-provoking, and people will inevitably look for ways to eliminate stress and escape from the reality of their situation. Therefore, franchises that offer entertainment (i.e. stores that sell books, movies, games, etc.) and those that focus on escape (i.e. liquor stores, day spas, etc.) will find an influx of customers seeking their goods and services.

Demand-Based Goods and Services

Researching trends and forecasts is a beneficial strategy to potential franchisees, especially during times of economic hardship. Franchises that offer high-demand goods and services will thrive no matter what the economic climate is like because they tend to be need-based rather than want-based. For instance, the aging baby-boom generation will produce a higher demand for medical supplies and in-home care services, so franchises offering these goods and services will continue to turn a profit despite economic hardship.

Conclusion

You don’t have to give up on your dreams just because times are tough. You can still own a profitable franchise during a recession as long as you do your research and choose one that is most likely to weather—or even float right by—the economic storm.