Delivery services. Grocery stores. Convenience stores. E-commerce. Gas stations. Cleaning services. Liquor stores. Auto repair. Lawn care. Pest control. Mailing/shipping services. Contracting. These are among the businesses that have been deemed “essential.”
Undoubtedly, the pandemic put into focus the types of businesses that fare comparatively well during a crisis.
Because of the shutdowns and rollbacks in operational capacity for several businesses—and the unfortunate job losses related to them, many workers are seeking to secure a more stable source of income into the future. And franchisors are welcoming those looking into franchising as a way to take more control of their earning potential.
The most successful entrepreneurs are those who grab an opportunity during a time of crisis. This (the pandemic) is creating an opportunity.
“People lost jobs and there was a fear of not getting them back,” says Gregg Koffler, VP of franchise sales and development for Paris Baguette, a bakery franchise with a notably strong “grab-and-go” component. “My message [in April] was geared toward the opportunity in front of us now … offering potential entrepreneurs the chance to have a stronger hold on their destiny.”
If you’re looking into franchise ownership as a way to potentially secure your financial future, there are certainly some things you need to keep in mind before making the jump.
Owning an essential business brings with it the satisfaction of providing necessary services for people. In these times especially, that’s a noble pursuit.
Chris Buitron is president of a business that was deemed essential in the midst of the COVID-19 pandemic: Mosquito Authority, a pest control franchise serving communities across the U.S. and Canada. He suggests the following when weighing whether to buy an essential business:
One: Be sure you’re up to owning a business.
“There are no guarantees with owning an essential business,” Buitron cautions. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”
Two: In the case of franchise resales, know a bargain vs. a bad investment.
The franchise market will likely gain a number of franchise outlets for sale (aka franchise resales) that could offer a quicker path to opening for new franchisees. However, it’s of utmost important to check the numbers. A relatively low sale price can tempt some people into making a poor buying decision on a business.
According to Buitron, it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an [existing] essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.
Three: Consider franchises as ownership opportunities with a community component.
While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs.” According to the latest from the Canadian Franchise Association, franchises directly employ around two million people in Canada.
In addition, the community aspect can help you as an incoming franchisee as well. “One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you,” Buitron says. “Reach out to other franchise owners to get a sense of the company’s commitment and support.”
Editor's Note: The tips from Chris Buitron were reprinted with permission from News & Experts.