Who is the greatest victim of the recession? While almost all businesses are affected by this economic downturn, recent research shows that mom and pop stores just may be the most so. While many of the smallest businesses were holding on when times were good, it is almost impossible in a recession to compete against large national competitors with a recognizable logo design and a well publicized brand.
This has led to an increase in a phenomenon known as conversion franchising, when an established small store converts to a franchise. Although conversion franchising is possible in just about every industry, it is most common in real estate, hotels, auto shops, restaurants, and other industries in which franchises have a substantial presence.
In many cases conversion franchising can mean the difference between staying open and closing. Although it can cost quite a bit of money in fees and materials to convert to a franchise, many business owners see their sales double almost immediately. Many franchisors are responding to the trend by offering special deals for conversion franchising, allowing established independent business owners to adopt an iconic brand at a cut rate. A good example of this is well known convenience store chain 7-Eleven, which began its Business Conversion Program five years ago. The result is that conversions are predicted to make up sixty percent of the company’s franchise growth this year.
Although it may sound attractive, there are downsides to conversion franchising. First, getting access to financing can be a challenge for an already floundering business, and franchising can be expensive even with all of the conversion programs out there. Second, customers who are loyal to the independent business may be turned off by the chain. Last, independent business owners lose much of their autonomy, which may be the reason that they became an entrepreneur in the first place. This can be an emotional upheaval as well as a financial one.
There is a compromise that may allow you to reap some of the benefits of a franchise without actually converting: rebranding. The main thing that a franchisor brings to the table is a well known brand that has a set marketing scheme and been proven to resonate with the business’s target audience. While adopting this proven brand is a shortcut to marketing success, it is not the only way. It is completely possible for an independent ‘mom and pop’ business to develop a brand that is just as relevant and professional as those used by multinational corporations. The key is working with a professional logo designer to develop your brand.
The problem with most independent businesses isn’t the business itself. The problem is a lack of investment in branding. In an effort to save money, many businesses have a logo and a brand that has been designed either by a cut-rate designer or even the owner themselves. This can be a huge handicap in a competitive market. If you want to create an independent small business that will last in any economy, without a franchise, talk to a professional logo design company today.
