Between major bank failures and mind-boggling bailouts, 'recession' has lately become the most dreaded buzzword in the nation. But as always, whether times are bad or good depends on your point of view. Recession is not necessarily bad for business—in fact, some industries have no problem weathering recession because their services are necessity, not luxury. In fact, some business leaders are downright chipper about the situation. Check out our list of top industries for a recession to see why.

1. Healthcare. No matter what's going on, people still get sick and injured. Some studies have also shown that healthcare needs increase during recession due to the associated stress.

2. Repair services. Computers, cars, jewelry, houses. If it can be fixed, people will choose repairs over buying new replacements to save money.

3. Staffing services. During times of economic uncertainty, companies hedge their bets with temps rather than commit to hiring more long-term employees.

4. Education. Even in economic decline, people want the best education for their children. Supplemental learning centers, tutoring services, and test preparation franchises are all good bets.

5. Senior care. Home care services are growing fast. These typically non-medical services offer an excellent alternative to expensive retirement centers for seniors who are still in good health.

6. Business services. From payroll to PR, companies save money by outsourcing services rather than paying full-time staff.
 
7. Coupons. This is one business that improves when the economy slips. During these times, coupons are equally attractive to both upper- and lower-income shoppers.

8. Debt settlement. With personal debt at an all-time high, demand in the debt settlement industry is as great as it's ever been.

9. Resale shops. From sporting goods to designer duds, consignment shops offer a win-win scenario for shoppers and sellers alike. Already a $12 billion industry, the resale industry is expected to grow 5% this year while many major retailers take a tumble.

Holiday Outlook For Retail Franchises

Analysts are predicting a gloomy Christmas season as the effect of higher interest rates and economic uncertainty kicks in. In previous years, retailers' profits boomed as consumers took advantage of lower interest rates and a glut of credit to spend freely on Christmas goodies. This year, consumers are saddled with crippling debt, inflation and borrowing costs. So how do retailers plan to overcome the economic grinch? We asked four franchise retailers how they're preparing for the holiday season ahead.

Margaret McEntire, International President and CEO for Candy Bouquet: 
"I don't expect a slowdown. The WSJ says three things are recession proof: chocolate, liquor, and movie tickets. We are doing some rebranding and we've got some fantastic new marketing ideas. I'm also bombarding our franchisees with messages that we have grown through recessions before. I don't care if it's raining or the stock market crashed—if you walk into one of our stores, you'll smile. I've talked to a lot of franchisees and I'm not hearing recession woes. One store in the middle of nowhere was up 48% in August."

Katy Ott, Corporate Buyer/Merchandiser for Nothing Bundt Cakes:
"We are positive for the holidays. We haven't felt much from the economy—people still give gifts and we offer an affordable one. We prepared by ordering supplies in summer and shopped for a different price point. Normally we have packages at all different prices, but not this year. Our holiday packages are staying below $30. We are also sticking with 'red' packaging rather than 'Merry Christmas' so it can extend beyond the holiday. We're doing a lot of holiday training to refresh our customer service people and we're hiring greeters for the stores to hand out samples and direct traffic flow."

Brian Curin, President for Flip Flop Shops:
"We expect increases from last year. This is a $20 billion industry we're in and we're the only retail space dedicated to it so we've carved out a nice niche. We call the holidays our second summer. We always see two things happen during the holiday season. One: people spend more money just because it's the holidays, even during a recession. Two: people plan their warm weather trips and cruises and it's easy to drop by a Flip Flop Shop before heading out. The biggest thing we do to prepare is to bring in the right product mix that is geared toward the holiday season, then do the PR to let people know these things exist."

Seri Blatt, Co-founder and Co-CEO for Two Blonds & a Brunette Gift Company:
"Typically 75% of our gifts are sold for Christmas. Many are thanks and appreciations for clients. They may be spending a little bit less, but they will still be spending. We are offering many different price options and we will customize gifts for clients based on what their needs are. So if they only want to spend $30, we can tailor the gift to meet that. We're trying to stand out from the typical gift basket company by using unique items. It will be a true gift so nobody will open it and say 'OMG, what am I going to do with this?'"

Coping With Volatility In Your Business

By: Flo Schell

Ok…the world is not performing up to par these days. While this particular economic challenge is certainly more frightening than usual…the truth is we’ve faced big stuff before. And we’ve made big choices: Shall we give in to the volatility? Or shall we remain vital in spite of it? Here’s what I think; every day we get to wake up and figure stuff out. So today is no different than any other...although for sure the ‘stuff’ feels bigger. On the best of days, you wake up strong and rested, ready to meet whatever challenges are out there. Your will is solid, your skills are honed, your confidence is up, and your spirit is filled with vitality. On the worst of days, you wake up tired, sluggish, lacking in confidence and dreading what the day brings. Your spirit is low and it all feels too big to manage.

When the volatility of the world is taking its toll… you may feel you have no other choice but to give in to it. But the truth is…you do have a choice.

Here are some steps to consider:

1. Think of other unstable situations you’ve been in. How have you handled them? What inner strength did you rely on? Can you reach inside and find it again?
2. What support people did you turn to for advice on how to handle the insecurity or unpredictability?
3. Is it time to re-engage your support team?
4. Look to the SWOT as a reliable analysis tool. Click here for your copy: http://www.floschell.com/swotanalysis.html 

1. This exercise has you examine the strengths, weaknesses, opportunities, and threats of your product, service, or industry.
2. Discuss the SWOT results with your support team.
3. Make careful intelligent decisions about what to do next.  
4. Take one action that will lead to a positive result.
5. Watch as your vitality goes up with each small success.
   
   

Flo Schell, EdM, is a certified business coach and founder of Franchise Coaching Systems. Contact her at FloSchell@OptOnline.net and visit www.FloSchell.com

Franchisors Take Steps to Help Franchisees in Economic Downturn

Papa John’s International Inc. announced this month that it would ease economic pressures on domestic franchisees by reducing the price of cheese typically charged by the franchisor and exploring ways of providing financial assistance during the credit freeze. Papa John’s, parent of the 3,317-unit pizza chain, already has rolled back the cheese prices for the final two months of the year. The move by the pizza segment’s third-largest player could reduce domestic franchisees’ food costs by about 1.4 percent, the company said. In addition, the company said it would consider offering additional financial assistance to franchisees, but it did not detail those plans.

The moves follow similar undertakings by rival Domino’s Pizza, which said late last month it would consider offering bridge financing or royalty cut backs to certain franchisees that want to expand but can’t obtain financing for restaurant acquisitions. Industry observers have said that franchisors, especially those reliant on franchisee expansion and health, will have to brainstorm financing alternatives to help franchisees survive an economic downturn that has raised operating costs while slowing sales. (Nation’s Restaurant News, 11/4/08)

McDonald’s Posts Impressive 3Q Results

As independent and chain restaurants nationwide struggled in recent months amid dwindling traffic and waning consumer confidence, the apparent main beneficiary of a growing trading-down effect, McDonald’s Corp., reported upbeat third-quarter results and its highest same-store sales gain this year. Net income of $1.19 billion or $1.05 a share, compared with $1.07 billion, or 89 cents a share, for last year’s third quarter, beating Wall Street’s forecast of 98 cents a share. Corporate revenue rose 6 percent to $6.27 billion, from $5.9 billion a year earlier, and U.S. same-store sales grew 4.7 percent.

Overseas, recession worries have not affected McDonald’s. Same-store sales for the third quarter rose 8.2 percent in Europe and 7.8 percent in the Asia-Pacific/Middle East/Africa region. Top growth opportunities in Europe include building more drive-thrus, now in about half the McDonald’s there, and expansion in Eastern Europe. Growth in China should total 150 new restaurants for 2008, a 17-percent surge, the company said. (Nation’s Restaurant News, 11/3/08)

Yum! Brands Plans Major Restructuring

Yum! Brands Inc. is reportedly planning to eliminate several hundred corporate jobs and restructure its U.S. business as a result of an ambitious refranchising program. Positions will be eliminated from the Louisville, Kentucky headquarters of the corporation and its KFC brand, as well as the Irvine, Calif., base of Taco Bell and the Dallas home office of Pizza Hut, according to an Associated Press report. Yum is also the operator-franchisor of Long John Silver’s and A&W All-American Food. Yum posted a 16-percent drop in U.S. operating profit for the third quarter ended Sept. 6, with KFC leading the decline. The company said it plans to reduce the percentage of company units within the KFC system to 10 percent by selling corporate stores to franchisees. At present, 20 percent of the chain is company-owned. Yum's overseas restaurant profits have been much higher than those in the United States, especially in emerging markets such as China. Yum operates or franchises about 35,000 fast-food restaurants worldwide. (Nation’s Restaurant News, 11/12/08)

Subway Plans 1,300 New Stores in Ireland

Sandwich franchise Subway is aiming to create 1,300 new jobs by 2010 with the opening of 119 new stores in Ireland. The chain claims it has overtaken McDonald's in this country, opening more than 181 outlets compared with the global fast food chain’s 97 stores. According to the company, it is currently opening an average of five stores in Britain and Ireland each week. Subway, which was established in 1965, has more than 30,000 stores in over 87 countries worldwide. (Irishtimes.com, 11/13/08)

Well-Capitalized Chains Reap Benefits of Favorable Leases, Prime Real Estate

Deflation in commercial-lease rates and a swelling inventory of vacant retail properties are allowing many restaurant chains to keep expanding in spite of the nation’s gloomy economic outlook. Relatively unimpeded by the financial crisis, some mature brands and midtier growth concepts with strong balance sheets say they are in the driver’s seat for the first time in years when it comes to picking sites and winning concessions from landlords. Shopping malls and so-called lifestyle centers are one retail arena where chain operators wield greater bargaining power. With dozens of high-profile, big-ticket retail centers bludgeoned by the credit crisis and besieged by vacancies, some operators claim they are positioned better to influence lease terms. Well-known brands such as Buffalo Wild Wings, Beef ‘O’ Brady’s, Chipotle Mexican Grill, Maggiano’s Little Italy and The Cheesecake Factory are finding that strong brand images and high average-unit volumes are lending them negotiating clout. (Nation’s Restaurant News, 10/27/08)

EasyHotel Plans Major Expansion in 2009

EASYHOTEL, the budget hotel chain set up by easyJet entrepreneur Stelios Haji-Ioannou, plans to open between 15 and 20 more hotels next year as its expansion picks up pace. According to chief executive Lawrence Alexander, Liverpool, England and Glasgow, Scotland are among the many locations of the hotels due to open across Europe and the Gulf. The first German EasyHotel plans to open in the next year and other franchises are to open in Porto in Portugal and Sofia in Bulgaria. The firm, which operates in Switzerland, Hungary and the UK, hopes to open two hotels in the Gulf emirate of Dubai next year. Rooms cost anywhere between GBP 25 and GBP 80 a night, depending on when they are booked. (Hotels Magazine, 11/2/08)