Feb 7, 2020 - Blog, Franchise Articles by |

Lots of franchisors claim to offer “recession-proof” franchises. The basic idea behind this claim is that the products or services their franchisees offer either: (i) are so essential that people will need to pay for them no matter what, or (ii) come into even higher demand when the economy takes a downturn.

While both of these make sense in theory, it is important not to lose sight of the fact that no franchise opportunity guarantees success. Even if your business is capable of surviving during a recession, this does not mean that it will survive during a recession (or even during more prosperous times).

Recession-Resistant Franchise Sectors

Perhaps, then, the term “recession-proof” isn’t quite as apt as “recession-resistant.” A recent article on Entrepreneur.com uses this term to describe five franchise sectors that might be less susceptible to economic contraction:

  • Restoration Services – “[C]ompanies in the restoration business will always have customers. . . . Plus, much of the work is paid for through various types of insurance so the bulk of the bill may not fall to the homeowner.”
  • Senior Home Care – America is getting older . . . [and] [s]enior home care allows . . . non-medical caregivers to come to seniors’ homes and help them with everyday chores they aren’t able to do themselves for a fraction of what senior living communities would charge.”
  • Hair Care – “People may cut back on some personal grooming services, but hair care is rarely one of them. . . . That’s great news for people in the hair care industry, which is not only recession-resistant, but also unlikely to be outsourced or replaced by technology.”
  • Automotive – “[In] 2017, the average age of cars in operation topped 11.7 years, a growth of more than two years in just the last decade. As Americans continue to hold onto their cars for longer, auto repair will continue to thrive.”
  • Resale – “Whether it’s clothing, technology, athletic gear or household items, resale stores do particularly well in a recession. . . . [R]esale also appeals to the younger generations because of their environmentally friendly business model.”

As far as franchise lists go, this one’s not bad (although we might forego a trip to the barber shop if times get tough). Franchises in these sectors are certainly more likely to fare better in a recession than ice cream shops, massage parlors and fitness centers. Once again, however, it is important for prospective franchisees to keep in mind that no franchise is a sure thing, and your success as a franchisee is ultimately dependent upon your ability to build a profitable business.

Speak with National Franchisee Attorney Jeffrey M. Goldstein

What else do you need to know before you settle on a particular franchise opportunity? As it turns out, quite a lot. If you are thinking about buying a franchise, it is important that you speak with a franchisee attorney about the legal risks involved. To request a free initial consultation with franchisee attorney Jeffrey M. Goldstein, call 202-293-3947 or tell us what franchise you’re considering today.

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