In a down economy, many businesses become like ostriches with their heads in the sand, waiting for issues to resolve themselves before looking at growing their operations. However if you follow the flock, you will miss out on a great time to expand your business.

Take a page from the notes of industry leaders. When their competitors adopt a "wait and see" strategy, their leaders charged ahead, because strong businesses, with solid operations, look to take advantage of weak economies and expand into new markets and often unopposed by those who are waiting for 'a better time'. This trend can be witnessed across a broad spectrum of industries. Wal-Mart, the world's largest retailer, continues to expand as K-Mart closes units. Carrefour, the world's second largest retailer, is planning to add 830 outlets in 2003. Southwest Airlines and Jet Blue are adding new routes while United Airlines drops them. Starbucks continues its march towards market saturation with over 6,000 locations. Interestingly, Wal-Mart, Southwest, and Starbucks all made Fortune's Top Ten most admired companies list. What do they have in common? All are expanding their operations now.

This is occurring in franchising, too, as companies with strong concepts are growing their businesses, despite uncertain economic times. Francorp's Client, Culver's, the Wisconsin-based chain of restaurants featuring "Butterburgers" and frozen custard, opened 37 new locations in 2001, 41 locations in 2002, and is opening between 45 and 50 in 2003. Even with these growth rates (the Culver's Chain will have doubled in size during a recession), Craig Culver admits in a recent interview, that it is currently a tough time in the restaurant industry. Culver's is not alone in expanding their business during this period. At the end of last year, Panera Bread had 478 locations; 115 of which were opened in 2002. Meanwhile, Krispy Kreme Doughnuts opened 63 new locations in the last fiscal year and looks to open another 77 in this one.

Jimmy John's, an Illinois-based Francorp Client, which features gourmet sandwiches, has grown from 83 units in 2000 to 190 in 2003. During this economy, they have begun expansion into new territories, including California and Las Vegas.

There are many reasons why tougher economic times create growth opportunities for businesses, especially those that franchise. Franchising has many unique attributes that ease the strain of expansion, even when the economy is in the doldrums.

Finding & Obtaining the Best Locations
For many businesses, location is a critical factor. During an economic downturn, prime locations will open up and the landlords who may not have returned your phone calls before are now calling you to see if you can fill one of their key spots.

In franchising, you can take advantage of these ripe locations more so than you can with any other expansion model, because in franchising, the franchisee buys the land, builds the building, and pays for the leasehold improvements, inventory, and fixtures. Typically, a franchise buyer will refinance their home to free up cash in order to purchase a franchise. With interest rates at an all time low, prospective buyers have more cash on hand and are using this to buy franchises at a record rate.

Hiring the Right Managers
When the economy is bad, quality people find themselves "downsized." There are more "good" people on the market today than there were five years ago, so this has created a great opportunity for franchising, in that there are a record number of qualified buyers on the market. They are looking for the opportunity to realize the "American Dream" of owning their own business. As franchises, these owner/operators are more motivated than any manager you could hire because franchisees own their location.

Capital for Expansion
Franchising allows you to expand more rapidly than your present system will allow because your source of funding is your franchisees. They supply the working capital for opening new locations and territories, so that you can use your capital in other critical areas, like marketing and brand building strategies.

So, is it a good time to expand your business? If you are planning to add locations or move into new territories, but are uncertain of when to do so, then now is the time. If you see opportunity out there for your business to grow, then take a page from the 'Most Admired' companies and expand your business now because, as these market leaders know, if you don't take advantage of the opportunity, someone else will.

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