Many former employees have taken the leap to start their own businesses during the COVID-19 pandemic. Additionally, while some businesses have struggled (and are continuing to struggle) due to the pandemic’s economic effects, others are struggling to keep pace with pandemic-generated demand. With this combination of factors in mind, is now the perfect time to invest in a business services franchise?
As a franchisee law firm, we have seen many economic shifts and industry trends come and go. We have also seen many new franchisees try to ride these waves—only to have them come crashing down well before their franchise agreements are set to expire. But, we have seen many franchisees find success as well, and some trends certainly last longer than others.
So, what does the current state of the economy mean for the business services franchise industry?
The Market Is Already Heavily Saturated
One factor to keep in mind is that the business services market is already heavily saturated. According to one report, the business services sector generates annual sales just shy of $1 trillion, and there are nearly 100,000 active business services franchises in the United States (which account for about one-tenth of the industry’s total revenue).
But, what about the fact that there are now more businesses that need support? This could indeed be relevant; however, aspiring franchises must also consider whether they will be able to find a niche among a large number of competitors that already have established networks and local presences.
Some New Business Owners May Prefer to Work with Other New Business Owners
At the same time, being new to the field could prove advantageous in some cases. For example, some new business owners may be interested in getting their support services from other fledgling businesses as well. Rather than becoming just another customer of an existing business, they may prefer to work with someone who has more of a vested interest in helping them succeed.
Buying a Business Services Franchise is a Long-Term Investment
Ultimately, deciding whether to buy a business services franchise (or any other franchise) is a complex and time-intensive process that requires careful consideration of numerous economic and financial factors. It also requires introspection; and, once you settle on a franchise opportunity, you need to engage a franchisee law firm to review the Franchise Disclosure Document (FDD) and franchise agreement. Depending on the terms of the agreement, you may need your law firm to negotiate on your behalf as well.
Given that most franchise agreements have an initial term of two, three or five years, prospective franchisees need to approach their opportunities with a long-term view. If you would like to know what this means from a legal perspective, we encourage you to contact us for more information.
Contact Our Franchisee Law Firm for a Free Initial Consultation
Are you thinking about buying a business services franchise? If so, we can help you make an informed buying decision. To get started with a free initial consultation, please call 202-293-3947 or tell us how we can contact you online today.
