20 Recession Resistant Franchises

Promising picks to choose fromeven in this economy


With a team that includes son Tyler, right, Carolyn Irving-Powell is cleaning up as a ServPro franchise owner. (Photograph by Cindy Momchilov)

Child tutoring and supplemental education services have ballooned in recent years into a $69 billion industry, according to IBISWorld Research (www.ibisworld.com). “It’s one of the fastest growing segments of the kid’s market,” says Lesonsky, who notes its biggest clients are parents of tweens. “If you have a kid and they’re not doing well in school, good economy or bad economy you’ve got to get them help.” The sector saw 11% average unit growth over the past three years and looks to be on a curriculum to score even higher.

Helping the sector get there are its biggest companies:  Kumon Math & Reading Centers, Sylvan Learning, and Huntington Learning Center. While the Japanese import Kumon offers subsidized rent to qualifying franchisees, Sylvan goes on record that prospective franchisees in specific markets such as Atlanta, Chicago, and Sacramento, California, can potentially earn $200,000 to $1 million in revenues.

Tax Preparation Services
Many of the franchises in this industry capitalize on the simple fact that they provide a service that people either cannot or do not want to do themselves. The two biggest players remain H&R Block and Jackson Hewitt: both showed unit growth during the 2009 tax season. Significantly smaller than its sector leaders, Liberty Tax Service has grown by 20% since 2005. And about 10% of its 2,800 units are black-owned.

But when paired with similar categories such as quick printing, the outlook is slightly negative going into next year says John Reynolds, IFA’s vice president of new business development and president of its educational foundation.  “One of their main drivers is small businesses and others who use those services, so when those businesses look to cut back then that has a negative impact on the areas.”

Disaster Restoration
Not knowing when a natural or man-made disaster will strike doesn’t bother Carolyn Irving-Powell, because she and her team are always prepared. The 49-year old wife and mother of two purchased a Servpro disaster restoration and recovery franchise back in December 2005. After relocating in 2001 from Overland Park, Kansas, to Little Rock, Arkansas, with husband Ernest, a locomotive engineer, Powell wanted a fresh start.

“I [worked] part-time; mostly babysat, but I wanted to do something else,” says Powell, who worked 12 years in the accounting department of Sprint Nextel headquarters prior to the move. After extensive research, Powell selected Servpro because she liked that they had a “proven method of running a business.” Servpro’s services include fire and water damage cleanup and restoration; biohazard, crime scene, and vandalism services; as well as mold mitigation and remediation. So with no prior knowledge or interest in the industry she became their newest franchisee.

Her $75,000 startup costs got her a truck mount (for water removal), two computers, proprietary software, and other equipment. Not included were a van and a location. For three weeks, she trained in Gallatin, Tennessee, at the company’s headquarters learning hands-on the process of disaster recovery and restoration and what it takes to run the business’ back office.

(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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