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Recession? What Recession?

How three companies beat the odds and made 2009 a very good year

This story appears in the May 2010 issue of Entrepreneur. Subscribe »

What do dry cleaning, and hotels have in common? The bad news is, they were all hit hard by the economic downturn. The good news is, well, it's not all bad news for these industries. Each had companies that defied the odds, powered through the challenges of 2009 and came out on top of their categories--for the first time, no less--in Entrepreneur's Franchise 500® ranking. We talked with the top execs in each company about their secrets to surviving the and standing out from the crowd.

Certified Restoration DryCleaning Network
As consumers cut the luxuries from their budgets, dry cleaning businesses suffered. But not Certified Restoration DryCleaning Network. That's because CRDN's business focuses on textile restoration for disaster victims.

"It's not a 'want to' business, it's a 'have to' business," says CEO Wayne Wudyka. "We solve problems. We help people put their lives back together. We did that for 24,000 families last year."

Thanks to its niche, CRDN had its best year ever in 2009, with sales surpassing $105 million. Although most CRDN franchisees also own retail dry cleaning businesses, "in many cases, CRDN is saving their companies," Wudyka says. But they're doing far more than just surviving. Thirty-nine of CRDN's 90-plus franchisees saw their 2009 sales exceed $1 million. And by continuing to build the company's relationships with insurance carriers, Wudyka believes things will only get better.

"While our growth has been noteworthy," he says, "we feel that we have only scratched the surface of what's possible."

Keller Williams Realty
The real estate industry has been slammed, but Keller Williams has endured times like this before. "Keller Williams was founded 26 years ago during one of the toughest markets on record--when interest rates were higher than

18 percent," says CEO Mark Willis. "So our business model prepares us for fluctuating economic situations."

The key, Willis says, is understanding that the consumer does business with the agent and not with the company: "We can only grow if our agents do."

With that in mind, Keller Williams has survived the downturn by focusing on supporting and educating its agents. Throughout 2009, agents had free online training, regional seminars on using technology and social media as sales tools and a tour of North America by the company's co-founder, Gary Keller. Keller also laid out the tactics in his new book, Shift: How Top Real Estate Agents Tackle Tough Times. The most important tactic for Keller Williams franchisees, according to Willis, is "leading with revenue"--that is, spending only money that the business has generated. It seems to have worked. The company saw a cumulative 86 percent increase in franchise owner profits for 2009, and while the National Association of Realtors' membership decreased by 7 percent, Keller Williams' agent count grew to more than 76,000.

/Hampton Inn & Suites
"There was a lot of gloom and doom last year," admits Phil Cordell, global head of Hampton Inn. You can say that again: Average hotel occupancy was down more than 8 percent from the year before.

But you can hardly tell from looking at Hampton's numbers. The Hilton-owned brand added about 150 new hotels last year, launching it to its highest ranking ever in the Franchise 500.

Cordell credits Hampton's success to the strength of the brand, which combines low rates with many of the perks and customer service that higher-end hotels offer. The recession itself also helped: Hampton initially targeted business travelers, but the down made the hotels appealing to budget-minded leisure travelers, too.

"The Hampton brand has always been a stable performer," Cordell says, "especially in times of economic challenge."

Although most of Hampton's growth last year was in the U.S., the line is ready now to take on the world--and plans approximately 100 more hotels in 2010. "We have ambitious plans for the UK and further global expansion," Cordell says. "We are seeing an increase in developer demand for well-recognized, branded hotels."

So much for doom and gloom.

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