Service-Based Franchises: Businesses That Thrive in Recession

Are there service-based franchises in businesses that thrive in a recession? Here are examples of many trending franchises in 2021 that are recession-proof.

Trending Franchises in 2021

Are there really businesses that thrive in a recession? Though an economic downturn impacts many businesses negatively, not all businesses see their revenues and profits crumble.

For example, non-essential (or discretionary) goods will bear the brunt of the impact. Luxury goods and tourism companies are hit by falling disposable incomes. On the other side of the coin, non-discretionary goods, such as groceries, will suffer far less impact. 

In fact, as money gets tight, discount stores may find that they pick up business from changing consumer spending patterns.

But what about service businesses? Can service-based franchises thrive during a recession?

Yes, there are recession-proof businesses for 2021

Conventional wisdom says that service businesses should fade fast during a recession. When people see their disposable income fall, they will be more inclined to do more themselves to save money. 

But not all service businesses are equal. Some service-based franchises, for example, will see steady sales during a recession. Others will boom. 

You don’t have to be brave to start a service business during a recession. You just must be smart, and identify which service sectors are likely to thrive. Having identified these, you can then match the best to your entrepreneurial capability (take our Franchise Aptitude Test).

Profit from service businesses that make money when people save money

During a recession, many people will try to save money. Restaurants will invariably report lower guest numbers, while groceries report higher sales – people eat at home rather than dine out. There’s a similar phenomenon in service businesses.

Instead of trashing a faulty appliance and buying new, people are more likely to call in repair service. The same can be said of a wide range of services. Trending franchises in 2021 within this category may include businesses like Mr. Electric (electrical installation and repair services) and Mr. Appliance (the largest full-service appliance repair company in the world). Home renovation and repair services, like Roof Maxx, are also likely winners.

Service business franchises with a healthy outlook

Another sector that should never be overlooked is healthcare. People need to maintain good health. With greater access to healthcare funding today, and, of course, with the effects of COVID-19 still fresh and ongoing, an investment in a franchise in the health sector could prove highly profitable. Franchise businesses operating in this area include companies like American Family Care (urgent care centers).

Home care is also a growing sector. Many seniors and others need home care, with franchise businesses like Golden Heart Senior Care and FirstLight Home Care providing a good model for investment.

Franchises that won’t get trashed

One person’s trash is another person’s treasure.

Trash collection and junk removal businesses also do well during recessions. People who have more time on their hands tend to do more decluttering and spring cleaning. Leftover junk needs to be removed and disposed of – and this is the opportunity for companies like Junk King and Junkluggers to really ramp their revenues.

Finance your lifestyle with finance franchises

Finance is another sector that can do well during a recession. People and businesses must still file with the IRS. While the number of mortgages sold may contract, mortgage companies tend to widen their margins. Debt collection and repossessions rise.
Many businesses in the financial sector may not thrive during a recession (some will), but they usually remain relatively stable.

3 more sectors that become sexy during a recession

Here are six more sectors that can be highly profitable during a recession:

1. Courier/delivery services

While sales may fall, products must still be delivered to their destination. In the current climate, courier and delivery services have been one of the best-performing business types.

2. Childcare

Childcare is one of the last expenses that parents eliminate from their budget.

3. Technology

Whether it is sales or servicing, there is a growing need for businesses in the technology field. COVID-19 has exploded the use of IT and technological solutions in businesses and in the home – indications are that this will continue.

What recession-proof franchise should you buy in 2021?

Starting a business in a recession doesn’t need to be hard work. By considering which franchise opportunities are likely to do well when the economy is suffering, and then matching your skills to them, you could get in at exceptional value, there is likely to be less competition and more businesses seeking your entrepreneurial flair.

To start your journey, either learn more about our Executive Career Change services or take the Franchise Aptitude Test.


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