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Originally Posted On: Franchising 2021: Optimism Abounds | FranchiseRESALES.com
In April of this year, Rick Bisio, the owner of Franchise Resales and author of the bestselling book “The Educated Franchisee, 3rd Ed.” wrote a Forbes Coaches Council article about the economic impacts of Covid in the franchise industry.
Maybe you have heard that most businesses have been negatively affected by the impacts of Covid. The negative perception is based on decreased consumer spending and the inability to stay afloat in the current market. However, like many others, Bisio viewed this perception as an exaggeration. While there has been a decline in consumer spending, many businesses continue to prosper and grow.
The pandemic caused many negative impacts on business, and some owners had to close their doors. But while some businesses suffered, others prospered. In fact, most franchises in the home service industry will tell you that 2020 was a great year due to the strong shift in spending toward the home.
Business success stories during the pandemic are not as rare as we think, especially in the franchise industry. This is because many franchise businesses function in markets that did not experience the effects of shutdowns or customer withdrawals.
As you may know, when you choose to run a franchise, you have a business advantage compared to a company started from scratch. You are operating under a reliable brand with an established customer base. There already is an element of trust within your desired customer base. As a franchisee, you may find yourself one step ahead of other business owners.
Although, shutdowns and regulations challenged businesses like hotels, beauty salons, and restaurants. Regulations did not dampen growth in other business sectors at all.
The Home Service Industry
During the height of the pandemic, people retreated into the comfort of their homes for safety. Only for some to realize their homes were not too comfortable after all. Maybe you experienced this realization or knew others who did. As a result, the home service industry experienced a boom during the pandemic. Homeowners saw value in upgrading their homes, probably since they spent every moment inside.
Whether or not people wanted to be busy or distract themselves from the uncertainty in the news, the shift in consumer spending was evident. A new focus on windows, painting, kitchens, gardens, pools, and overall home improvement, drove growth of over 8% in the sector of franchising in 2020.
Before Covid, some of these franchisees worked exclusively with commercial offices. However, a whole new market came to play, and their customer base expanded into residential homes and buildings.
Once regulations eased and commercial buildings opened, some home improvement franchisees experienced their highest sales from their newly diversified customer base.
Franchises Remained Stable
Franchises that did not lie in the home improvement sector mostly remained stable because of their dependable name or essential-based work. At the same time, it is important to note that not every business experienced a desirable outcome. Restaurants, fitness, health and beauty were all hit hard. However, even franchisees in the harder hit areas are seeing a quick rebound in 2021.
We all learned something new this year and faced challenges one way or another. It is important to remember there is hope. Many people feel hungry to return to normal. Click here to read more on Bisio’s thoughts about what’s next for the franchise industry. If you’re interested in becoming a franchise owner, don’t hesitate to use our services or reach out.