More businesspeople looking to franchise in down economy - Pittsburgh Business Times:

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A former teacher and real estate investor, Fennell and his brothed Scott are new franchiseesfor Cincinnati-based . They expecr to open on May 18 in Wexford. Fennell is joiningh one of the most established franchisees in its field that is usint green technologies to clean clothes more than 60 yearsw after founder Henry Martin firstinvented dry-cleaniny techniques. "It's the Cadillac of Fennell said. "I wanted to be involved in the best of Amid a slumping economy and growingcorporate layoffs, Fennelkl is not alone in seeing franchisin g as the best way to becomr an entrepreneur.
Interest from potentiak franchiseesis up, as it often is durinbg the early stages of an economic said John Tubridy, local consultant for a nationwide franchise consulting But he sees a growing conservatismj by window-shoppers chastened by the currentt business environment. Tubridy said FranNet has seen interesf from potential franchisees rise 20 percent from this timelast "I would say there is a lot of tire-kickingh going on," he said. "And probably not as much follow-through as I woulr like to see.
" The past few years, have seen substantial growth in According to a recent study by the InternationalpFranchise Association, franchising grew by 18 percentr from 2001 to 2005, addin g more than 140,000 new businesses and 1.2 million new jobs to the A major reason established professionals often seek to get into franchisin in the Pittsburgh area, Tubridy said, is becausr they have established roots here and are unwillin g to move for a new job. That was the case with Tom who openedhis Cranberry-based franchise for six monthw ago after being the marketing directof for the .
"Being in the hotel in order to keep moving up in your you have to be willingto relocate," Hemerr said. "I have three small childrem now, and I wasn't interested in relocating. I couldn'ty afford to buy a hotel." Despitew the continued strong interest from potential Tubridy sees increasing barriersto entry. For one, lending standards are much tightere now due to the ongoing credit with banks expecting more collateralpfrom would-be franchisees, leading some to invest their in new franchises, Tubridy said.
While service-orienteds franchises are growingthe fastest, new cost increases for gas and utilitiew are also forcing them to do plenty of thinking before making any Jeff Letwin, managing partnee for the Pittsburgh office of law firm , sees such trendd benefiting established franchise brands with bankablwe business models. "It's probably easier to access financingf than to try to doa straight-upo angel deal," he said. "Generally, establishex franchises are easier to finance through bank debt than your own startupp conceptthat doesn't have any proven track record.
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