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In franchising, most companies know how to prepare for seasonality, employee turnover and economic downturns. But no franchise systems have had to face the breadth and depth of the economic impacts of our current and uncertain times.
The good news? Franchise sales will rebound eventually, and given an extended, months-long lead-to-sale timeframe, franchisors can start preparing their organizations and ramping up their lead generation efforts right now.
Three core factors will primarily contribute to this resurgence, and they’re the same factors that drive franchise sales, in general, no matter the state of the economy: people, capital and resources.
The unemployment rate is expected to average close to 14 percent for the second quarter of 2020, and it may reach 16 percent for the third quarter before beginning to decrease slightly beginning in Q4. Even many of those who have not lost their jobs yet are underemployed or looking over one shoulder to see if they will be the next to go.
One of the reasons franchise sales have traditionally fared well during a down economy is that unemployment or underemployment often spurs people to