Franchise Lawyer Blog

Macroeconomics and One-Person Shops

We continually search the “world wide internet,” as my Dad calls it, for signs that the skies are brightening (or not) for the franchising world.

If you are looking for brightening, look no further than the IFA Smartbrief, the email blast from theInternational Franchise Association, which offers well-organized selections from the media world attesting to the premise that the franchising glass is half full. Yesterday’s offering lead off with an article from The Street, an online source which offered five reasons why franchising would be on the upswing in this moribund economy. The reasons: (i) loosening credit; (ii) more ways to finance a franchise; (iii) commercial space is available; (iv) franchisors are more willing to help with expenses; and (v) more talent is available.

These theories have been in circulation for some time. We wrote on this blog in May 2009 that franchised businesses might weather these economic storms more easily because of franchisor support, qualified refugees from unemployment, imaginative financing, cheaper real estate and just because historically they supposedly have. Whether that is proving to be the case remains to be seen. There are success stories and there are just as many failures.

One thing that does consistently emerge in any examination of the economic landscape is evidence of the resiliency of the American worker. One franchising model that seems to have caught on is the one man (or woman) franchise: franchises that do not need employees. Some of these are mobile franchises, about which we have just written.

According to The Economist, Americans started an average of 555,000 businesses every month from 1994 through 2004. Some individuals, however, are afraid of taking that step to self-employment because they do not want to deal with the personnel issues that come in tandem with owning a business. Luckily, there are franchise opportunities available that do not even need employees.

Business News Daily–an online website that provides information for startups and small business owners– recently offered as examples several franchises that do not require employees, including:

1. America’s Swimming Pool Company: Franchisees can operate their own professional pool and spa maintenance business through this franchise, and can do so alone–even without having any background in pool service.

2. Stroller Strides: This franchise offers franchisees the opportunity to provide fitness programs and motivation services to moms–all in just a few hours work a day.

3. Lawn Doctor: Through this franchise, solo franchisees can offer lawn and maintenance service on a flexible schedule.

4. Safeguard: This franchise provides business management solutions to small business owners including check, form, filing and printing services. And, through Safeguard, franchisees can work alone.

5. Mom Corps: This staffing franchise helps experienced individuals looking for flexible work and low overhead costs find employers with short-term staffing needs.

6. Sir Grout: This franchise operates mobile businesses for grout, tile, stone and wood restoration.

Running a franchise without the need to oversee employees can be extremely beneficial. Franchisees do not have to deal with the responsibilities that accompany hiring and managing others, nor do they have to worry about complying with employer payroll laws or worker’s compensation. A first-time business owner can focus all of his or her energy on making the business grow, rather than getting bogged down in managerial details.

So, as things continue to be tough going, one discernible trend is a simplification of the approach to business, the above representing perhaps the most basic evidence of that.

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