Four Franchise Businesses That Are Recession and Pandemic Proof
May 17, 2021
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As an entrepreneur, one would love to be in a business which is immune from market uncertainties. This can never be completely true for any business, but just in a few cases there could be business opportunities which are minimally impacted by market uncertainties.

Market uncertainties can be defined as Economic downturns. These can also be termed as Recession (when overall earning potential of a market reduces, or when the total value of the market decreases). The Indian market has been plagued by Demonetisation, Introduction of new GST rules, Lockdown due to Covid Pandemic in 2020, and a second Lockdown due to Covid pandemic in 2021. Such events have led to an uncertain economy and in other words moved the economy into a recession.

In these challenging times, people want to know if there are Franchise business ideas that are minimally impacted or not impacted at all by recession or lockdowns.

To identify such Business opportunities we have to understand 4 Criteria that keep a Business Immune from Recession:

  1. Not Cyclic in nature: Chosen business opportunity should not be cyclic in nature, like a movie hall which runs to full auditoriums only when a super-hit movie is running, else stays at low occupancy.
  2. Not Seasonal in nature: Chosen franchise business idea should be independent of seasonal changes. Take for example an Ice Cream retail counter which is relevant in summers but loses its sheen in winters.
  3. Not fashion or trend based: The business cannot be influenced by Fashion or it dies an early death, like a garment retailer, where once the clothes go out of fashion, the retailer gets stuck with unsold inventory and has to liquidate at losses. E.g. – The moment a new actress wears bell-bottom jeans, the normal jeans inventory becomes slow moving.
  4. Not a daily need: Eating out or fine dining is a once in a while experience. You wouldn’t want to go to a fine dine restaurant daily with your family. It will be unhealthy on your pocket and body both, thus not in the category of something that is needed daily by a consumer.
 

The good news is that there actually exist 4 Recession Proof Franchise Opportunities in India, which can be described as Recession Free or Lockdown free business opportunities. These are:

  1. Laundry Franchise: The laundry industry has been growing at break neck speed since 2018. Experts claim that this is the 7th largest industry with a market size of INR 2.2Lac Crores. 96% of this industry is currently unorganised thereby creating a space for organised and quality conscious players to enter the field. This also checks all the boxes as listed above:
    1. This is a daily need service. We like to wear fresh garments daily, be it summer, winter or rains. The need for fresh clothes daily is independent of economic swings. One wouldn’t cut costs and wear dirty clothes to a meeting when business is bad, right.
    2. Irrespective of season or weather, the demand stays consistent, and creates immense opportunity for repeat business.
    3. Irrespective of what the fashionistas recommend, one would want his jeans, shirts, shorts, t-shirts, tops to be washed and ironed.
    4. Definitely a daily need! Be it lockdown or an open market, the laundry category in most states in India falls under the essential services domain and is operational throughout the lockdown.
    5. Covid pandemic has increased our sense of hygiene and cleanliness and thereby created a higher demand for fresh clothes. The days of repeating the same jeans for the next 2-3 days are over.

2 Upcoming/Fast growing brands in Laundry Franchise are:

    1. Tumbledry Laundry & Dry Cleaning
    2. German Laundry
  1. Education Franchise: The education line is a consistent field of business. Parents would make innumerable sacrifices to ensure a good education for their children round the year. Be it primary school, middle school, senior school, Under-Graduate course or a professional course. There are so many supplementary studies that are also gaining traction in the market like an Abacus for early childhood learning, theatre workshop, etc.

    Not cyclic nature, independent of seasonal changes this business opportunity is one of the most stable industries. Partially disposed to fashion, short term opportunities do arise like courses in coding, digital marketing and similar. The primary education vertical stays extremely stable and that’s why multiple players and even reputed business houses have entered the field of education. Last but not the least, this is a daily requirement enforced very strictly by all Indian parents alike irrespective of religion, caste, status.

    3 Upcoming/Fast growing brands in education industry are:

    1. DPS (Delhi Public School)
    2. Jaipuria Schools
    3. Birla Open Minds

    Note: Lockdown scenario in India has made this sector less attractiveness as physical classes have been stopped, but in a few years’ time when the Covid pandemic is behind us, this will, once again be the most desired sector for new entrepreneurs.

  2. Fitness Franchise: The Covid led lockdown in India has taught people the importance of a strong physical being, and therefore a heightened focus on personal fitness. There are so many opportunities in the fitness sector like a Gym, Yoga Class; Non Weights based fitness, Pilates, Zumba and many more. The fitness segment caters to youngsters, women, sportspeople, elderly and even kids. 

    Staying fit and healthy throughout the year is the new motto in India. Obviously a healthy and fit personality also adds to the glamour quotient in a social setting. New investment is pouring in this sector and Sachin Bansal (Flipkart co-Founder) has invested a significant proportion of his wealth in the new age health venture – Cure Fit. 

    No seasonality impact in this sector, as people want to exercise throughout the year. Partially swayed by fashion trends like Pilates or Zumba, but traditional avenues like Yoga, Gym, Aerobics continue to be very stable and devoid of any fashion ups and downs. Every doctor visit ends with an advice for improving fitness levels, whether it is to lose weight or to fight illnesses like Diabetes or Thyroid. 

    3 Upcoming/Fast growing brands in fitness domain are:

    1. Cult Fit
    2. Anytime Fitness
    3. Golds Gym

    Note: Lockdown led social distancing has led to the closure of most of the fitness centres, forcing people to workout at their homes, however this industry remains a fast and easy to start business venture, not requiring expensive real estate.

  3. Health Franchise: If there is one business that is truly immune to the ups and downs of the economy and even the lock-down has not created dent on its profitability, it is the Healthcare industry. This opportunity is available at low entry costs by investing a pathology lab collection centre or a mid-sized clinic with Multi Specialty streams and doctors coming in and going or at a high entry cost by opening a full scale hospital. This industry has place for interested people at all budget levels.

    Seasonal weather changes that bring about cold, cough and fever, might influence the inflow of patients a bit more than usual, nevertheless throughout the year people need to visit the doctors for regular health check-ups, co-morbidities, sudden illnesses, pathology test, etc.

    Someone or the other in the family is always in need of medical assistance. Homes with kids are prone to visit their paediatricians for routine check-up and vaccination. The industry never loses its charms and keeps on creating new business opportunities in fields like Cosmetics, Skin Care, Dental, Physiotherapy and many more. The only challenge for a new entrant is the hiring of trained manpower – Doctors, Nurses, and Support Staff.

    3 Upcoming/Fast growing brands in healthcare sector are:

    1. Apollo Clinic
    2. Clove Dental Clinic
    3. Dr Lal Path Labs

     

    Summary

    Research into 42+ industries led to zeroing down the 4 sectors mentioned as businesses opportunities which have less or no Impact of Economic downturns vs other market Industries.

    If you have limited amount of money, a Laundry business franchise like Tumbledry Laundry & Dry Clean store sounds best with its opportunities of low investment (upto INR 25 lacs). Good for new entrants in the field of business as prior experience is not required to enter this vertical. Shielded from the pains of old school business industries, the laundry vertical has No Credit issues to manage and No Inventory to worry about. A laundry setup is for life and generations of a family have been known to run laundry and dry clean stores.

    However if you have idle funds available, Health care will be an apt investment platform to work with. The investments are high ranging from 1Cr to 5 Cr, the returns do come late, but this again is a set up for life. Having someone qualified with a medical degree in the family adds more value to this business opportunity.

    All in all, there do exist opportunities that are more immune than others when the downturn hits the economy.

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One Response

  1. Wise thoughts about franchise business put very nicely and in short. A good read indeed for all those who are planning to start a franchise or some business.

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