Many would-be entrepreneurs may feel that the current economic climate poses far too much risk than they are willing to take. Although times certainly are tough, the advantages of franchising are especially beneficial in that they provide insulation from a bad economy.

The first and foremost advantage of franchising is that the risk faced by most startups is avoided by the entrepreneur cashing in on the goodwill of the franchise and the adoption of a proven business plan. At a time when consumer uncertainty may keep customers away from the new high-end boutique opening up down the street, a known and trusted brand becomes more valuable. A franchise business plan avoids the trial-and-error associated with many new businesses which may be survivable in good times but can be downright fatal in bad. These advantages to franchising exist no matter the economic climate. However, bad economic times translate into opportunity for the savvy entrepreneur. Franchising allows you to take advantage of that opportunity while minimizing the risk associated with the times.

Whether your particular financial situation allows you capital to invest or will require you to finance your business, the pains felt by the financial sector can work to your advantage. Uncertainty in the stock market and a weak dollar make ownership of a real business and its associated assets perhaps even more promising than investing in securities or holding on to cash. For those looking to finance their business, many banks are desperate to find safe lending opportunities. As it is well known that franchisees are far more secure as borrowers than other entrepreneurs, you stand a much better chance at taking advantage of today's low interest rates.

A key concern in today's economy is inflation, primarily brought on by climbing energy and transportation costs. The bulk buying power of franchises counter the general rise of prices faced by everyone else. Through relationships with suppliers, starting a franchise business takes the sting out of current inflation. Franchising allows you to own your own business, yet still receive treatment from suppliers usually reserved for large customers.

To further alleviate climbing inventory costs, slowdowns in other sectors will allow you to make up the difference elsewhere. An often overlooked positive aspect of the slumping real estate market is that land and labor are cheap. Whether the franchise that you are interested in requires franchisees to lease or allows them to buy their site, the depressed market will let you lock in very reasonable real estate costs. Factor in slow times for building contractors and you also stand to save a good deal on build-out.

Far more important than the specific benefits that a franchise business offers during bad economic times is the relationship between franchisor and franchisee. Unlike most new businesses, in which the world is against you, as a new franchisee you will have a well-respected national company rooting for you. When you succeed, the franchisor succeeds, and vice-versa. Not only do you have access to top-notch training, you can often turn to a fellow franchisee for advice. The support system for a franchise business can help to carry you through bad times and eventually can help you take greater advantage of the inevitable economic recovery.

There is no denying that these are uncertain times. Uncertain times, however, bring that much more value to the certainty and stability of owning a franchise business. Fortunes are made in the wake of economic turmoil. Owning a franchise is a great opportunity to do so, without all the risk.

Learn more about this author, Eric Bradstreet.
Click here to send this author comments or questions.

---

Add your voice

Know something about 2008: Is this a great time to own a franchise business??
We want to hear your view. Write now!