Top franchises for 2009
“In 2008, businesses in real estate, and constructions, as well as in financial sector (loan brokerage, insurance) were on top of entrepreneurs’ preferences. However, the demand for this type of franchises dropped by a staggering 70% this year. Retail industry was also one of the most popular destinations of franchise requests as well, where the demand contracting by almost 30%”, said Bogdan Alexandrescu, managing partner at Francize.net.
From an investor’s standpoint, the crisis’ impact was rather psychological than financial, with many of them meeting all the requirements to open a franchise.
But on the other hand, certain franchisers decided to scale back their expansion in this period, while other took advantage and made investments in order to find franchisees and grab a bigger slice of the market.
“Still, in case of several franchises, due to the already-tested business patterns, many of the franchise business we work with find the resources to withstand the crisis, most of the times suffering a mere profit contraction instead of a loss. We also see a growth trend in the number of franchises, both local and international who choose to open business only to profit of the advantages and opportunities that economic crisis creates”, said Alexandrescu.
According to Francize.net’s managing partner, the most popular franchises that are successful, are in services (advertising, human resources, IT&C, insurances), food, sports bets, usually those businesses that require a small investment.
For example, a fast-food restaurant can start with a franchise fee of 12,000 euros and a 40,000 euro investment, and to open a franchise in advertising services, the fee can start from 5,000 euros up to 8,000 euros, and the investment can be in the range of 12,000-15,000 euros.
This year’s trend: Smaller franchises and less risky
Last year, in real estate, constructions and retail, as well as in fast-food, international franchises increased in popularity, leaving local businesses behind.
As Alexandrescu commented, the market will see a continuance of the trend this year, as well as of investors’ preferences. Furthermore, franchisers will start offering increasing support to their potential partners, such as a reduction of franchise fee or the possibility of a joint-venture.
Up to now, the market faced a low interest from investors in certain areas.
“Apart from changing preferences in opening a franchise, the interest expressed in certain fields over others has narrowed as investors seek small franchises that carry low risks. A new category of investors emerged, investors coming from middle and top management of national or multinational companies, who relinquished their positions and decided to start their own business”, said Bogdan Alexandrescu.
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