, we are not in a typical recessionary cycle. In the past, buying a franchise could have been a good bet during a recession, as long as it was in the right industry. The credit crunch is having a big impact on franchising at the moment.Hardest hit will be:
- start-up franchises lacking a firm track record
- restaurant franchises; especially sit-down
- any franchise that depends on disposable income
Because of this squeeze on credit we're seeing banks and other lenders holding back on any new investments. Many of these banks are exposed to the subprime mortgage mess and need to clean house before they make new loans. BTW the banks are really tickled that we have come to their rescue.
I suppose you could play it safe and buy into a debt consolidation type franchise?
The only winners in a market like this are well heeled capitalists that feast on the carnage of the losers, of which there are many, including many fine businesses heading into bankruptcy, banks with more 'good' debt than 'bad' debt (yet precariously positioned), pension funds, and municipalities that were heavily invested in firms like Lehman Brothers.
Now is a good time to dig deeper into your research and busy yourself with the art of due diligence.
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In another Franchising thread, I just posted that one of my dream franchises would be an 
