20 Recession Resistant Franchises

Promising picks to choose fromeven in this economy

Quick-Service Restaurants
An avid customer already, Pitchford saw the Subway sandwich chain as the perfect opportunity to be her own boss. “It allowed me an affordable entry point,” says the 38-year old. “I didn’t know how to build a store, but the system is already there for you and you’re able to align yourself with a known brand.”

Using $70,000 in savings from her full-time job as a physician assistant and $100,000 in a home equity line of credit) she purchased her franchise. Much of the startup costs went toward training at Subway University; purchasing ovens, chairs, freezers and other equipment; as well as a down payment for the rental and build out of her 1,300-square-foot space. Franchisees have to scout and secure their own store location; Pitchford chose the former location of a travel agency within a complex that includes retail shopping as well as resident apartments and co-ops. “The rent is reasonable and there’s a built-in customer base,” says Pitchford, whose franchise has four full-time and six part-time employees and 2008 revenues totaling almost $400,000.

“You can never go wrong picking the right food company,” says Rieva Lesonsky, a small business and franchising consultant and author of Start Your Own Business (Entrepreneur Press; $24.95). She agrees that quick-service chains are standouts during this recessionary period. Quick-service is the only sector that forecasters at accounting and market research firm PricewaterhouseCoopers anticipate seeing growth in all three areas of establishments, economic output and increased jobs.

Franchisors such as Subway and McDonald’s are able to provide franchisees with national marketing and advertising backing. For example, when Subway launched its $5 foot long promotion franchise-wide, owners such as Pitchford (who is required to allocate 4.5% of her sales to national marketing) saw immediate results—sales spiked 52% during the promotion compared with the prior year.

“Doni has done a good job of maintaining a high level of customer service and keeping her store well staffed and employees friendly; these are keys to success during hard economic times,” says Mark Choi, development agent for Subway, Queens County, which is the territory Pitchford’s franchise is located within. “When people have less money to spend eating out, you have to give them a very good reason to visit your business.”

(View the 20 Recession Resistant Franchises list here.)

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7 Responses to 20 Recession Resistant Franchises

  1. tony says:

    What about the Pet industry? It’s bigger than the toy, jewerly, retail industries combined.. bigger than video game too..
    Bad research

  2. Terry Shea says:

    We feel that our mobile arcade business is recession resistant. There will always be parties for kids, Mitvahs and special events in the municipal markets. So Fl alone has over 15,000 events and parties each month, give me 1% of that per franchisee @ an average of $780 per event and I am a happy dog wagging my tail.

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