As 2024 approaches, Nick Powills, Mainland CEO, 1851 Franchise Publisher, and The Melting Pot Board Member, joined Yahoo Finance Live to discuss the ins and outs of the franchising industry. He explains "the franchise industry tends to work opposite that of the economy. So when the economy goes down, franchising goes up," though he cautions not every brand follows the trend.
With "potential turbulence" coming in 2024, Powills sees an opportunity for those interested in franchising to capitalize, as weaker conditions often boost franchise demand. He advises utilizing "your head, your heart, and your gut" in evaluating fit, since "success is ultimately up to you."
While sectors like education and haircare are attractive, Powills argues "the greatest tools" are passion and hustle, as you can fail with any concept without proper work ethic. He stresses that "you have to align your passion with the financial bandwidth that you have," to choose the right investment.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
JULIE HYMAN: Nick, thanks so much for being here. Give us sort of the big-picture view on the franchise industry right now, what kind of growth it has seen, and what kind of people are franchise owners.
NICK POWILLS: So the positive is the franchise industry tends to work opposite that of the economy. So when the economy goes down, franchising goes up. Now, not every brand follows this trend. But for those that do, it opens up opportunities for those looking to get into franchising to actually purchase that brand.
The reason being when there's turbulence in your job, you tend to start looking at alternatives as to how can you build wealth or cover your salary. And therefore, they look into franchising. So as we head into potential turbulence in the early parts of 2024, that's positive. And the other side of that is the presidential election, which creates more turbulence. So for those looking to get into franchising, 2024 will be quite attractive to those that are looking to make a career change.
JOSH LIPTON: And so, Nick, if you're thinking we might hit some turbulence in 2024 economically, are there certain kinds of franchises, Nick, certain sectors that you would think of as more defensive?
NICK POWILLS: Yeah. Let me answer this in a few ways. So first would be your head, your heart, and your gut. For anybody looking at buying a franchise those are your greatest tools that you'll have when evaluating an opportunity, because success is ultimately up to you. When you buy a franchise, you get the framework, and you get to skip ahead and you get to use a operating system that's already in use. So there is positivity in that. And it shortens the timeline it takes to go from a small business to established.