It is no secret that the economic impacts of the COVID-19 pandemic have hit franchising particularly hard. Many franchises who were already struggling to turn a profit while paying their royalties and marketing fund contributions saw their revenue drop substantially, and many went out of business as a result. Among those who survived, long-term outlooks vary, and a significant amount of uncertainty remains.
As a franchise law firm, we hear from prospective and active franchisees every day. We know that many franchisees are struggling, but we also know that there is currently a large market for individuals and groups interested in pursuing new franchise ventures. In particular, certain industries appear to be poised for post-pandemic success (at least theoretically), as recently highlighted in an article on FranchiseDirect.com.
Industries That are Either Pandemic-Proof or Pandemic-Related
The industries discussed in the FranchiseDirect.com article fall into two main categories: (i) those that are likely to see consistent revenue regardless of the effects of the COVID-19 pandemic; and, (ii) those that are poised for success due to the pandemic’s effects. While those in the first category are generally more likely to have staying power, if projections regarding “permanent” impacts of the pandemic prove to be correct, those in the second category could prove to be viable long-term as well.
Industries falling into the first category include:
- Childcare and pet care
- Commercial services
- Home maintenance and repair
- Mailing and courier services
- Senior care
Industries falling into the second category include:
- Contactless services
- Sanitizing services
- Sports, education and other child-related services and programs
- Virtual restaurants and kitchens
As you can see, there is some overlap. For example, while kid-focused franchises are a popular choice right now due to the fact that many schools have transitioned to virtual learning, many parents will still be willing (and able) to pay for lessons and activities post-pandemic. Likewise, while the need for contactless services and sanitizing services will wane, some people and businesses will undoubtedly still be willing to pay for these services well into the future.
Are You Thinking About Buying a Franchise in 2021?
If you are thinking about buying a franchise in 2021, what does all of this mean for you? Even under normal circumstances, choosing a franchise to pursue requires a careful market analysis. It also requires introspection: What type of business do you want to run—and will you be passionate about running on a day-to-day basis?
When choosing a franchise to pursue, the viability of the franchise model is just one of several factors to consider. You need to make an informed decision based on your personal needs, wants and capabilities, and you need to make sure you are comfortable with the legal terms of the relationship.
Contact Our Franchise Law Firm for a Free Consultation
Goldstein Law Firm is a franchise law firm that exclusively represents prospective and active franchisees. We offer four tiers of fixed-fee franchise business review programs focused on helping prospective franchisees understand the risks of franchise ownership. To learn more, call 202-293-2947 or contact us online to arrange a free initial consultation with founding attorney Jeffrey M. Goldstein.