Jeff Brazier leads development activities for Kiddie Academy, including franchise development, finance, real estate and construction.
Having seen the disruption brought on by the pandemic, many people are hesitant to start a new business right now, but not those with an entrepreneurial mindset. In the eyes of an entrepreneur, this is actually the ideal time to diversify and grow your portfolio.
Many know the economy has been hit hard — small businesses in particular — and it will take some time to rebound from the pandemic. Child care, hospitality, food and professional services are just a few of the industries expected to lead the economic rebound, and while many may still be skeptical, industries such as these are solid investments in this economic climate.
Why Do Entrepreneurs Invest In Franchises?
For people who are hesitant about starting a new business or investing in a franchise, consider some of the advantages:
The fundamental value proposition of franchising is that it provides more security, less risk and a greater chance of success.
Many people have been furloughed or even let go from their jobs due to the pandemic. We’re living in a time during which people may not be keen to start over in yet another corporate career. There’s something to be said for exercising greater control over your professional career by starting a new business or exploring business ownership opportunities.
The location has always been an important factor in the success of a business and now there could be many more opportunities to take advantage in terms of real estate. Landlords or landowners are expected to be more flexible, which helps when signing a long-term lease or acquiring property.
Franchisors have always operated months and years in advance and the pandemic certainly hasn’t changed that. If anything, it’s given them an advantage. With the focus always being on the future, the business has continued over the past year and a half.
Financing A Franchise
To its credit, the government has helped businesses by providing numerous financial assistance programs. As Chief Development Officer for Kiddie Academy, a network of educational child care facilities with over 275 locations, our team has helped guide our franchisees to take advantage of those programs, as well as providing unmatched and unwavering support to our system. The outcome? No Kiddie Academy locations were permanently closed due to financial hardships related to Covid-19, and we are more than 90% back to pre-pandemic revenue levels.
Although credit markets have tightened in response to the pandemic, financing continues to be available at historically low rates to qualified entrepreneurs through Small Business Administration (SBA) loans. Combined with extremely low interest rates, these various funding options make it easier to become a business owner — especially with the connection to a strong franchisor.
What’s more, the interest level from potential franchisees is higher now compared to pre-pandemic. At the beginning of 2021, we saw a 15% increase in leads and a 166% increase in franchise agreements that came from referrals, as compared to Q1 2020. After witnessing the necessity for child care, our franchisees felt confident about continuing their journeys with our organization.
Exploring The Opportunities
For those interested in franchising, especially in a post-pandemic world, consider these important questions:
Is the business part of an essential industry? I and my team believe child care franchises were at an advantage during the pandemic (and in the recovery phase) due to the essential nature of our services. Many parents still needed in-person child care during the height of the pandemic. Now that everyone is emerging from the pandemic, the company is recovering fairly quickly, especially since parents are returning to their offices. That’s consistent with patterns seen in previous economic downturns.
What is your comfort level? Starting a franchise comes in a wide variety of investment levels. Determine what you are comfortable with — a lower investment to allow you to test your business ownership skills or a bigger investment that will become your sole focus. Additionally, franchises have suggested or required levels of involvement from franchisees. Can you commit to being on-site at all times and interacting with customers? Or do you want a more hands-off approach?
These two focuses will help funnel you in a more pointed direction as you explore the world of franchising.
With select industries being more in demand than ever as our country comes out of the pandemic, I want to encourage people who may be hesitant about starting or owning their own business to invest in themselves — now is the time. Covid-19 has shown us that having control over your future, or even your present, isn’t always guaranteed. Acquiring your own business will grant you a sense of ownership that goes beyond the current state of things. That is something you simply cannot put a price on.