There’s been a thinning of the forest. Competitors who are undercapitalized may be going away. People with good credit are getting excellent interest rates now on loans. Cash is starting to flow at a brisker pace. The Small Business Administration will now guarantee up to 90% of each loan—it previously had guaranteed 75%—and the Treasury Department is purchasing more securities to open up the secondary market for SBA loans. I’m already seeing a positive impact from that. And if you need space for your franchised business, it’s a buyer’s market. Landlords are more likely to cover build-out costs upfront and amortize them over the life of a lease. That wasn’t being done 18 months ago. Also, staffing talent is widely available—and a proven business concept and familiar brand name should help attract it.
Meanwhile, the Sun Journal of New Bern, North Carolina has a good piece on franchising, quoting IFA figures stating that “400,000 franchised businesses now employ nearly 10 million people”. The story interviews Jack Tetreault, who is a counselor with L-A Score, who talks about how franchising is thriving in his local community.
In our community we have seen the successful expansion of fast food franchises such as Dunkin' Donuts, Tim Hortons and Subway Sandwiches, along with the already-established McDonald's and Burger King.
As these stories show, franchising continues to thrive on the street level and we believe franchising will be something that we'll be reading a lot more of in the coming weeks and months.