Unfortunately, there's no magic potion you can create to guarantee the franchise you buy will be a big hit. But you can learn a few tricks of the trade and master the major elements that give a new franchise the strength it needs to thrive. We asked franchising insiders to share the bare essentials for being a successful franchisee in this unique economic climate.
Cash Is Still King
To make money, you need to spend money...or at least have a little. While purse strings are tightening, franchisees still need to find the funds to maintain and grow their businesses. "They have to be funded. They can't go into this on a shoestring; if they do, today's economy will not allow them to succeed," says Jerry Wilkerson, president and founder of Franchise Recruiters Ltd., a Chicago-based franchise executive search firm. "There are going to be peaks and valleys like we've never seen before. You can go for one week without any business and just get completely run over by customers the next. It's that kind of economy, and without the cash to operate, you're not going to be able to continue your system."
Looking for ways to tighten your purse strings in today's economy? Read Recession Session for money tips, tech tactics and more.
Franchisees with the means will not only weather tough economic times--they may even come away with stronger businesses. "They can [survive recessions], creating more market share for themselves when the economy recovers," Wilkerson says. "Many franchisees realize if they get into the market right now and really slug it out, when the economy starts to grind out of this recession, they will have a bigger market share and a better future."