Substantial Pent-Up Demand for Franchise Brands
I have the great privilege of working with amazing franchise business owners every day. They are entrepreneurial and driven to achieve fantastic goals. I get to work one-on-one with them helping to build their empires. During these past months of unexpected challenges, they have risen to the occasion and come up with creative ways to serve their customers. In many cases they have even grown their businesses.
Now we have light at the end of the tunnel because we can count in months, even weeks, to when life should be getting back to normal. What does that mean for the franchise industry?
I am not the only one that is eager to get out, and to get out often! We are all getting antsy and want to get out of the house, see other people, dine, go to concerts and much more.
I have not spent as much as I normally would, nor have countless others, and that cash is eating a hole in our pockets! The personal savings rate hit 33 percent in April, the highest it has been since The Bureau of Economic Analysis started tracking that number.
What will those two things alone mean to the franchise industry?
You may be very, very, popular in the coming months if you own a franchise. As we get into the coming months and we put this challenge behind us, consumers will venture out more and more.
Working out at home or 1 to 2 days in the gym will go back to 5-7 days.
Restaurants will be able to seat more and more people inside until they hit or exceed their capacity. And as it warms up, they may keep the outdoor seating they added so they have more seats to handle more customers.
Retail stores will see all of us that have hit overload on our Amazon Prime accounts and want to see stuff before we pay for it. We will all miss those boxes and packing material.
Childhood education programs will be fully active and full of eager kids happy to be out among their peers and learning.
Dry Cleaners will be back to cleaning for office workers.
Party Venues will be in high demand as groups can gather.
Event companies will be getting calls for events that we all put off.
Office cleaning companies will be hard at work.
Auto repair shops will be catching everyone up on maintenance they put off.
Dog sitters and walkers will be pet owners’ best friends.
We will be travelling, seeing friends and family as well as hitting the road for work. Conferences! We get conferences back!
And that is just part of my personal list… But I would bet that many of you can relate to it.
Franchisees will have a potential for a perfect storm of pent-up customer demand combined with fewer service providers as those that were not heathy going into this, notably independent business that didn’t have the same resources franchise owners do. That combination looks to be teeing up a very interesting time for franchise owners that are ready for the good times that follow challenging times.
When should you be taking action to be ready to get any rewards? Right now.
If you are a current operator, vaccines are rolling out and that means your horizon is closing in. Go win raving fans. Develop any additional revenue streams you can use in the coming years as well. Dial in your marketing plan. Get your team in top shape and ready to grow.
If you are considering a new franchise, or growing a portfolio, this is perfect timing.
Service based franchises get from contract approval to grand opening faster that brick and mortar, but you still have training, finding an office or site, hiring staff, etc. While faster, that process still takes a little time and you have that right now. Moving fast will get you positioned early in the better times, which helps with growth and positioning against independent players in your market.
Brick and mortar locations that contract in the next 60 days may miss any early business spikes but join the party during an upswing in the market. This is outstanding timing as you have a pretty clear vision of the timeline but can still get in early on. The projections are that the real estate market will be advantageous for the coming year.
If you have the resources, you may want to contract for multiple units and pursue an aggressive development plan (opening schedule). Opening during a more active period can be advantageous to the growth of your location or territory. That said, I know franchisees opening right now when fear would dictate to most people to hunker down—and they are hitting home runs.
The clarity we have on timelines right now is a gift, one that shouldn’t be taken lightly if you are an empire builder.
What is your success story?
Let’s go find it!
George Knauf is a highly sought after, trusted advisor to many of the top franchise ownership groups in the world. With over 25 years of experience in both start-up and mature business franchise operations he is uniquely qualified to advise individuals that have dreamed of Building their own empires. Whether you have an existing portfolio or searching for your first franchise, he can help you to pursue your dreams. Contact the Franchising USA Expert, George’s Hotline: 703-424-2980.