Strong Franchise Outlook For 2021
While many small, independent businesses struggled to meet the unprecedented challenges of the pandemic in 2020, franchises generally were fortunate to have a support network built into their businesses. Franchises took different approaches to dealing with the pandemic. Businesses in some industries closed completely for many months, while others implemented changes that allowed them to keep providing services while better protecting the health of their customers and employees. These changes may have included going to a fully online presence, increasing home delivery services, or allowing employees to work remotely.
Predicting A Franchise Boom For 2021
Franchise business experts see a potential boom in franchise growth during 2021. With an unemployment rate of about 6 percent, not only is there a surplus of blue-collar workers looking for jobs, but there also is a large number of skilled professionals who have found themselves unemployed due to the pandemic. Many of these unemployed professionals, as well as other professionals who have simply reassessed their employment situations, may want more control over their future career. Purchasing a franchise may allow them this control without requiring them to start from scratch to open a new business.
The pandemic has made it easier for people to get the capital to do this, removing some penalties for withdrawals from retirement accounts and maintaining low interest rates for loans. The larger pool of potential franchisees has created the potential for a growth spurt for franchise businesses.
Even real estate conditions may be ripe for franchise growth. Unfortunately, small businesses are likely to continue to suffer and close before the restaurant industry can recover from the pandemic’s impacts. Experts anticipate that as many as 100,000 businesses will close this year in the restaurant industry. These predicted closures would create a potential abundance of available locations for new franchisees to set up shop.
Recruiting New Talent
Though the pandemic and its effects on small businesses are not in the past just yet, improving market conditions and widespread vaccinations may contribute to ideal conditions for companies that are prepared to seize the opportunity and try to recruit professionals to open new locations for their franchise. In order to be better prepared for the growth to come, experts recommend that these franchisors focus their efforts in the areas of strategic planning, documentation systems, site assessment, marketing, and franchisee standards. To recruit franchisees, franchisors may benefit from emphasizing the support that the company provided to its franchisees through the tough times of the past year, and highlighting improvements in policies and systems that came about as a result.
Continuing Improvements To Business Operations
Specialists in franchising recommend that franchisors use this time to give new thought to their systems and processes in all areas across their businesses. Other experts in the field believe that it is likely that many of the upheavals of the pandemic-time business model will remain and grow as factors in the franchise’s business model. Adjustments that became widespread in 2020, such as adding delivery or curb-side pickup options and improving online ordering and web presence, have revealed unexpected opportunities for growth and development.
Telling Your Company’s Story
Another way that franchisors can capitalize on the outstanding growth opportunities of the coming year is to invest in marketing and customer experience improvement, so as to lure back consumers who have backed away from active support of businesses in the past year. To reconnect with the community, franchisors may focus on clearly and effectively telling the story of their companies’ efforts during the pandemic. They could highlight how they supported franchisees and continued to serve customers throughout the past year. This approach of relating with the public may facilitate a boom in franchises’ business, as businesses and consumers alike begin to return to a semblance of ‘normal,’ or adapt to the post-pandemic ‘new normal.’
California Franchise Attorney
Mohajerian Law Corporation helps California franchisors and franchisees by offering them a wide range of cost-effective and efficient legal services relating to contracts, regulatory compliance and dispute resolution. Reach out to Mohajerian Law Corporation by calling (310) 556-3800 or by contacting us online to learn more.
Filed Under: Franchise & Distribution