Franchise Success in 2010.

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Franchise Industry Outlook

2010 has been an interesting year for business in general and in particular in franchising.  The seemingly never ending question of whether the economy is in recovery or we are going to “double-dip” has been at the top of everyone’s mind over the past 12 months.  So, we are heading into 2011 and I’m not sure that the answer is any more clearer than it was in January.  How does this all effect franchising and what does this mean for the franchise industry moving forward?

The franchise business has been positively affected by the weak job market.  With less opportunities for high-income jobs, more people are turning to franchising as a means to start a business and open a franchise that would equal the income they are accustomed to.  High-quality and talented professionals are buying franchises at a rapid pace in today’s market.  This trend looks to continue into 2011 with most signs pointing towards a weak job market through the coming year.

The franchise industry has also been positively affected by the low cost of assets in today’s market.  Real Estate, equipment, media buys and costs of doing business have been lower in 2010 than in previous years.  This trend looks to be changing going into 2011, with the recent pick up in the stock market and overall “bullish” trend, the cost of doing business looks to be returning to more typical levels.

The franchise industry has been negatively impacted in 2010 by the tight capital markets.  It has been difficult to get capital to start a new business for most franchisees.  This trend looks to be changing in 2011.  More programs have been put in place and implemented to encourage small business growth.  Banks and lenders have been given strong incentives to loan to small businesses and help capitalize the economies “come back”.

Franchising in 2011 looks to have a positive outlook.  With a large number of qualified candidates on the market and an overall upward trend in the economy, those who are forward thinking will benefit greatly from starting a business in the coming year.