Franchising During a Recession

Nail technician holding the woman's hand

There’s no denying that recessions can be difficult to navigate. As unemployment rises and the stock market falls, people are often left worrying about their next steps. You may be surprised when this path leads to opening a new business in the middle of an economic downturn, however, this opportunity may have appeared at just the right time.

Starting a new business can be an overwhelming process without the added uncertainties of a recession. By choosing to open a franchise, you’re eliminating extra stress with a business model that has already been built for you. Operating a franchise rather than building from the ground up also allows you to select an organization with a history of proven success.

There are many reasons why owning a franchise during a recession is a smart and strategic business plan:


Job security is a valuable asset for anyone to have during a recession. There are only a few solutions for someone to control their job security and these options become more limited when variables from a recession or pandemic come into play. Franchising is an optimal way to guarantee consistent and reliable employment for yourself. As long as you’re willing to put time and work into your new investment, then you can be successful.

Support System

A significant benefit of choosing to open a franchise compared to building your own business is that you will have a well-versed team to help you along the way. As a franchise owner, you will be backed by professionals who have prepared the business for tough financial situations and low economic periods. Marketing, operations, finance, development and training are all key areas that a franchise owner should feel strong support in.

Reliability & Consistency

Choosing a recession-proof industry is one of the most important variables to consider when opening a franchise during a downturn. Some industries are incredibly vulnerable to economic cycles, while others tend to thrive regardless of the climate. You may be surprised to learn that the beauty industry is one of these unaffected treasures. During recessions, consumers have been known to replace their big-ticket indulgences, like a tropical vacation or a new car, with smaller luxury items, such as a premium lipstick or extra pedicure service. This occurrence is so common and widespread that it has been named the “lipstick effect”. Companies that benefit from the lipstick effect often continue reporting consistent KPI’s throughout economic changes, making them an ideal franchise industry.

A recession shouldn’t feel like a road block for eager entrepreneurs. While starting a business during economic growth may sound more appealing, economic declines offer their own set of unique opportunities. Owning your own franchise means that you get to make key business decisions, decide your own schedule, enjoy job security security, but that you aren’t in this alone.