Consultants offer services to companies considering franchising

Long Island Business News, Jun 23, 2009 by Bernadette Starzee

The partners, who have young children, do not have time to take on additional routes themselves. "We thought it would be best to have someone else take over in their local areas," Saitta said.

While companies with the capital can develop corporate locations and hire managers, "a manager just doesn't care as much as an owner, who has skin in the game," Scarda said.

However, it's a tough time to sell a smaller franchise, despite a plethora of talent with time on their hands. "In the past, if there was a 'MidlifeCrisis.com,' that could have been our portal," Scarda said. "We used to get people who wanted to buy a franchise because they were sick of what they were doing and wanted a change. Now 98 percent of those who come to us have been laid off."

But while the talent is there, the credit and the cash aren't. In typical downturns, franchises sell well, Teixeira said, as people who get laid off from Wall Street and other places cash in their golden parachutes or 401(k)s. But this time around, with retirement accounts taking a big hit and credit hard to come by, franchises are not faring as well. "We have to wait this economy out," Mangione said.

Scarda advises his clients to focus on executive-model, low- investment and recession-resistant franchises, in the $50,000 to $100,000 range. According to Teixeira, in this economy, franchises in that price range, such as PRstore and Vehicle Tracking Systems, are better bets for those starting out than their more expensive counterparts.