Many people tracking developments in the domestic economy are examining the state of the franchise sector. Franchising has lead the economy back during past recessions and some experts are using franchising as a measuring stick for the economy’s progress as a whole. Which is interesting, because the word that many are using to describe franching at the moment is Momentum.
QSR magazine is a great resource for comprehensive reporting on affairs pertaining to the quick-service sector. They’ve published an honest story that charts some of the lows of the economic downturn for QSR franchises, and hints at a growing optimism among franchise owners. Most importantly, they say that new franchise applications are up.
Sandella’s Flatbread Cafe CEO Mike Stimola tells the magazine that he has received 30 franchisee applications this year and says that he has “definitely sensed a change” in the mood around his franchised business.
This positive sentiment is also shared by the head of Penn Station East Coast Subs.
“From April forward, franchisees started to become aggressive again,” company president Craig Dunaway says. “I think franchisees reached a conclusion that the worst was behind us.”
This is not simply an attitude of wishful thinking on the part of franchisors. They're witnessing an upsurge in interest. That said, a mood of pragmatism continues to rule, with more franchisees looking to open single-unit franchises, as opposed to multi-unit franchises.
April seemed to be the tipping point, the month where franchisees decided the economy had reached rock bottom. As the story suggests, progress is slow. But this is positive news from the franchisors side, especially as it comes from one of the most vibrant franchise sectors.