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Why 2021 Could Be the Best Year in Decades to Purchase a Franchise

Why 2021 Could Be the Best Year in Decades to Purchase a Franchise

Washington & Oregon have experienced widespread wildfires this September.  The short-term impact of the fires was poor air quality for a large percentage of the population of the Pacific Northwest dramatically impacting outside activities and the unfortunate loss of life, property, significant natural vegetation, and animal habitats in some of the most picturesque areas of the region. Long term, wildfires have the potential to create opportunity and life in nature as a component of a natural cycle that has been occurring in the Western United States long before Lewis & Clark first traveled through this country on the way to the Pacific Ocean.  One benefit of wildfires is that they remove the accumulative dead or decaying organic manner on the ground creating a mechanism for more rapidly returning nutrients to the soil and new life to blossom in what was previously an inhospitable environment.  National Geographic provides an excellent overview of the process in the following article:  https://www.nationalgeographic.org/article/ecological-benefits-fire/.

This spring and summer an economic wildfire in the form of COVID-19 did similar damage to the status quo of the business community in the Pacific Northwest. This wildfire sadly resulted in the death or fatal damage of many small businesses in the region.  As a firm that has served the entrepreneurial community in Washington, Oregon, and Alaska for over forty-five years, the catastrophic results for many small business owners and their employees from this 100 year event deeply saddens us. Unfortunately, it is impossible to change the past.  We as a business community need to look to the future and create a better tomorrow.

One opportunity created by the COVID-19 wildfire is the unexpected availability of quality vacant space in high traffic retail environments at better rent rates than have been available for years in the region.  Similar to how a wildfire creates opportunities for new vegetation to grow, these vacancies create opportunities for new products & services to be introduced to communities by entrepreneurs.  Entrepreneurs are risk acceptant and resilient by nature. Starting in May, IBA has experienced a strong desire to take action by this demographic group.  Action has taken the form of parties buying businesses, expanding existing businesses to new locations, and people evaluating franchised business opportunities as start-up possibilities.  Franchises are attractive to entrepreneurs because they offer a proven business model with an established support system that is ready for deployment at a desired location in a matter of months creating a unique time & place opportunity in a post COVID-19 world to pick up a previously unavailable 35, 40, or 50 yard line location a short commute from home as a business owner.  The advantages of being self employed include leadership, independence, and financial achievement.  Franchises offer the ability to do that without the need to create a business plan in the segment of the economy best tailored for an individual’s knowledge, experience, passion, and skill set.  A great neutral venue to educate yourself on franchise opportunities is Entrepreneur Magazine.   The following is their list of the 500 Top New Franchises for 2020: https://www.entrepreneur.com/franchises/topnew.  I am confident that a business model appropriate for every entrepreneur can be found on the list.

IBA is unique in the United States as we are one of the few business brokerage firms that have a certified franchise broker on staff.  Our certified franchise broker, Curt Maier, is affiliated with The Franchise Brokers Association (www.franchiseba.com) and represents for sale a high quality selection of the most successful and desired franchised business opportunities in the United States.  He welcomes the opportunity to educate entrepreneurs on the advantages of franchise ownership while also providing a comparative analysis of the alternative opportunities of business start-up and buying an existing business.  One of Mr. Maier’s favorite demographic groups to work with on franchise acquisitions, as a former U.S. Naval Officer, are veterans.  In addition to FBA, Curt is an active member of VetFran (https://www.vetfran.org/), an organization specializing in helping people transition from active service to entrepreneurship as a career path.

Quality nutrient rich soil, sun, and precipitation are necessary ingredients for the return of life to an area previously ravaged by a wildfire.  Small Business Administration (SBA) loans are often an important ingredient for fueling success with a franchise or business acquisition.  Another advantage of working with IBA is our ability to easily source SBA capital at the most competitive rates from the most experienced, knowledgeable bankers providing the highest level of customer service.  Mr. Maier or any member of the IBA team always welcomes the opportunity to introduce business or franchise buyers to the select group of highly vetted bankers our firm works with on a regular basis.

One of the market segments Curt has targeted for 2021 as a quality entrepreneurial opportunity to own a franchise is the education and childcare industries.  The September 11 issue of the Puget Sound Business Journal reported that unfortunately nearly half of child care providers have the potential of permanently closing their doors (https://www.bizjournals.com/seattle/news/2020/08/31/child-care-providers-face-closure-covid.html).  This wildfire destruction of industries important to working parents, their children, and the valued employees working in education and childcare as a profession is creating a void that needs to be filled.  The small business sector is best positioned to address the unsatisfied market demand for these important services.  IBA has long been a market leader in facilitating the sale of education and childcare businesses.  One of the business brokers, Stephen Cohen, on our education industry transaction team recently sold a Goddard School franchise for the founding owners to facilitate relocation.  The Goddard School is actively looking for entrepreneurs interested in opening new locations.  It is rare to find an owner interested in selling this profitable, time tested franchise prior to retirement age.

The United States economy is bouncing back.  The United States GDP is anticipated to rebound in excess of 30% in Q3 (July – September) https://conference-board.org/research/us-forecast.  Green shoots are beginning to be seen throughout the Pacific Northwest region.  An opportunity exists to be an early participant in a recovery that is anticipated to gain momentum in 2021.  No one benefits more financially than business owners in an economic recovery.  The economic forest fire appears to be under control.  The question is “what is your response as an entrepreneur?” to the dissipating smoke.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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