A new IFA survey of franchisors confirms the inevitable: the negativity around the economy has crept into the franchising community and financial pessimism is spreading.
Even talk of President Obama's new job stimulus plan to be announced next Thursday has not lifted spirits. The IFA's survey of franchise executives found that pessimism about the economy has tripled since March and positivity about the state of the economy has halved in the same time period (as has the number of franchise executives who feel that credit will be easy to access).
This is pretty worrying news all around, but it seems the downgrading of US sovereign debt, the continuing high rate of unemployment and the political clashes on Wall Street have combined to sap confidence in the franchising community in the economy.
A Huffington Post article on the story found that pessimism was actually deeper among franchisors than the rest of society. This seems directly linked to the problems that franchisees and entrepreneurs are having accessing financing.
President Obama has said that small business are the key to resuscitating the economy but with the plunge in business lending in August, it will take a lot of leadership and vision from the federal government to get the economy back on track. Small business people and franchisors are doing everything they can at the moment.