The Best Franchises to Own During a Recession
Launching a successful franchise business is a massive undertaking, even in the most ideal circumstances, but what can you do to insulate your business from the effects of a recession or pandemic? Some industries are able to weather the storm far better than others.
Back to Basics
During times of crisis or economic downturn, we all need to get back to basics and consider what goods and services are essential in our lives. The COVID-19 pandemic brought new challenges as many industries, previously considered to be recession-resistant, felt an impact on their bottom line due to new social distancing regulations.
There may not be concrete criteria for an industry to qualify as essential, but some sectors are better positioned than others. Some key things to look for in a recession-proof franchise business opportunity:
A franchise that keeps people safe
Provide a unique and expert service
Attract continuous return business
When we think of recession-proof industries, we most commonly think of businesses that are essential to our day-to-day lives or are necessary in the midst of an emergency. Healthcare, food, and elder care are some of the most obvious examples. But other industries maintain or even increase in importance during challenging times, and pet grooming franchises lead the pack.
Resilient & Thriving
The challenges presented by the COVID-19 pandemic threw the United States economy into a massive recession, the lasting effects of which we won’t fully comprehend for years. However, we can look back on recessions from years past to get a sense of how our current circumstances will play out. During the recession between 2007–2009, CNN reported that only 25 stocks listed on the S&P 500 experienced positive returns.
Due to the health and public safety concerns inherent in our current recession, some industries that have fared well in the past may be hit especially hard, such as travel, hospitality, and fitness sectors. Some of these industries have had to pivot their approach or pause services entirely, either of which can be damaging or even fatal.
The pet care industry is one of the unique examples of a market that has steadily grown over the past 30 years and has not only survived multiple recessions but thrived in the midst of them. Spending on pet care actually grew during two previous U.S. recessions (2001 and 2008), increasing by 7 and 5 percent, respectively. It is safe to say that the industry is experiencing similar growth during the current recession, as pet adoption and foster rates have skyrocketed, with more people seeking four-legged companionship during this challenging time. Maintaining a steady trajectory, pet care is predicted to become a $281 billion industry within the next two years.
The Time is Now
A year after the coronavirus pandemic first drove the U.S. economy into the deepest downturn in generations, high-frequency economic indicators forecast a strong rebound — yet there’s still a ways to go.
Twenty percent of the U.S. population has been fully vaccinated, with surging access expected to fend off a “fourth wave” of the pandemic. States continue to reopen their economies, and the impact of loosening restrictions and medical advances was clear in the better-than-expected February jobs report.
Among other reasons to feel optimistic, this tentative recovery phase is a time when real estate values are at an all-time high. With unemployment trending downward and inner-city apartment and condo rent prices declining, it is an ideal time to invest.
Franchise with Scenthound
Scenthound has established its position as a leader in the pandemic- and recession-proof pet care industry by providing a wellness-focused, membership-based franchise model that serves both the franchisees and the pet parents they care for.
Unlike other traditional grooming concepts, Scenthound focuses on the dog’s overall health, keeping pet owners informed and confident in the knowledge that we prioritize their pooches’ well-being above all, fostering customer loyalty and return business for franchisees. By innovating the pet grooming industry, Scenthound has secured its spot as an essential business during even the most challenging times, providing next-level care for our four-legged friends and a promising business opportunity for prospective investors.
If you would like to learn more about joining the Scenthound family, please visit us.