With talk of a pending recession, many wage-employed and self-employed people can feel nervous about potential instability in their work environment. At Merry Maids, we have not only been through a variety of economic situations, but we have continued to grow despite the circumstances.
While recessions are short-term situations, owning a business requires a long-term outlook, and that tends to be attractive to individuals who are ready for a more stable way of generating income. As a residential cleaning service, people don't initially think of us as being a recession-resistant franchise, but once they hear about how our business model works and is flexible to upticks and downturns in the economy, they start to see the advantages of franchising with us.
Here's a brief primer on how to evaluate industries that can thrive when the threat of a recession is looming.
What Constitutes a Recession-Resistant Franchise?
Franchise industries that are comfortably in the recession-resistant category share one or more common attributes. They include:
- Providing a product or service that is a need versus a want.
- Exhibiting a history of steady growth with a strong management team.
- Offering products and services that are considered good value for the price.
- Being flexible and adaptable to maintain a solid position in varying economic circumstances.
Industries with the Best Recession-Resistant Franchises
There are several industries that are always in demand despite the economic circumstances of the day. Within each of these industries are recession-resistant franchises that become attractive investments for building or adding to a business portfolio. These include:
- Senior Care. Our population continues to age and people continue to need care. For seniors looking to age at home (often as a financial benefit), services that facilitate staying in their homes longer are in demand.
- Child Care. For working adults with children, the ability to access childcare remains imperative to their ability to earn an income.
- Shipping and Transportation. Goods still have to be delivered across the country, even when economic times are not robust.
- Low-Cost Retail. As people change their buying habits, they tend to patronize lower-cost retail outlets (i.e. dollar stores) as a way to save money.
- Restoration Services. Natural disasters, flooding, and burst pipes happen all the time which makes restoration a business that is always needed.
- Residential Cleaning. Cleaning services help with senior care, can offer flexible schedules to maintain the service, and it is a low-cost service that homeowners usually choose to maintain in a recession.
How to Build a Franchise Portfolio
When building or adding to a business portfolio, recession-resistant franchises are good ones to pursue and can provide a steady return on investment if other franchises in your portfolio are less amenable to an economic downturn. Here are three tips to consider when adding franchises:
- Reference the FDD. You want to review the franchise disclosure document (FDD) to see if it allows for multi-brand ownership, and, if so, are there any restrictions on the types of brands you can pursue. Often, it’s good to add complementary brands to your portfolio to reduce expenses and co-promote.
- Opportunities with Your Current Franchisor. If you have a good relationship with your current franchisor and they have additional brands that are available for franchising, explore those opportunities. For example, Merry Maids is part of ServiceMaster Brands , which offers seven different franchise opportunities.
- Have the Infrastructure in Place. Be confident in your ability to manage more business by having the right financial and operational support available to handle multiple brands successfully. Know what resources you can share amongst brands (i.e. staffing, banking, etc.) and what needs to be separate (i.e. IT systems, software, reporting, etc.)
Businesses That Thrive: Merry Maids
When the business model is structured appropriately, the residential cleaning industry produces recession-resistant businesses. What helps Merry Maids through economic challenges is the 40-year history of the business. We have already been through difficult times, including the 2008 recession which was one of the worst economic crises in U.S. history. We know what to do to support our current franchisees and attract others who are seeking control of their financial futures.
The warnings of a recession often cause people to re-evaluate the stability of their work situation, and it can be a motivating factor in transitioning from wage-employed to self-employed. When franchising with a stable, multi-brand company like ours, you can feel confident in building your portfolio in a secure and growth-oriented way.
Contact Merry Maids to learn how you could take charge of your future by launching a recession-resistant franchise with us.