There are two myths in franchise recruiting that need to be discredited.
Myth #1: “None of these leads has money! They’re not financially qualified.”
Myth #2: “It’s not the right time to open a business.”
As a franchise executive or recruitment leader, if you are hearing versions of these myths from your recruitment team, you have a problem.
Myth #1: “No one has any money”
The Federal Reserve released data showing that $13.53 trillion of wealth was gained in 2020 in the U.S., a record year for adding wealth. For comparison, we’ve listed the previous 5 years of annual wealth gain in the country, based on Federal Reserve data published in the Wall Street Journal on June 27. The article noted this was the “biggest increase in records going back three decades.”
|Year||Annual Wealth Gain|
Source: Wall Street Journal
For perspective, the average annual wealth gain in the U.S. over the past decade was $6.12 trillion. And in 2008, in the depths of the Great Recession, $8.07 trillion in wealth was lost, with lower-than-average gains of $1.66 trillion in 2007 and $1.36 trillion in 2009.
More evidence? The S&P 500 return for the 12 months after Covid arrived was 29%, and median sales prices of existing homes were up almost 25% over the previous year.
Americans’ overall wealth is at an all-time high. Whether you are talking home values, stocks, savings, etc., personal balance sheets are strong. If you hear the reason for poor recruitment is that people with money cannot be found, do not accept it.
As the article noted, “The coronavirus pandemic plunged Americans into recession. Instead of emerging poorer, many came out ahead.”
Myth #2: “It’s just a bad time to start a business”
Another WSJ article, this one from July 11, published data on new business applications from July 2004 through May 2021. The numbers are based on IRS data compiled by John Haltiwanger, an economics professor at the University of Maryland. The article pointed out that he’d identified a trend that began in May 2020 and has continued into 2021: a huge spike in new business applications.
“It is off the charts,” said Haltiwanger in the article. “I think there is going to be a surge of dynamism. The question is will it be transitory, or true innovation?
|Year||New Business Applications|
Source: John Haltiwanger, University of Maryland, as reported in the Wall Street Journal
From 2015 through mid-2020, new business applications remained fairly steady in the 200,000 to 250,000 range. Then the number of new business applications began to spike, topping 300,000 in for the first time in December 2019. Since June 2020 that figure has remained well above 300,000.
The time is now!
Now more than ever, we have more people with quality balance sheets looking to start a business. In 30 years of franchising, these are the best market conditions for franchise recruitment that I have seen.
Yes, franchise recruitment is hard. Even in the best of times success requires world-class work on a daily and weekly basis. Your recruitment results, if not at record levels, should at least be producing solid, consistent results.
If your results are not meeting your targets, at least you now know two myths to watch for and quickly debunk. Get on track today and start enjoying this incredible landscape of opportunity for franchise recruitment.
Let’s go to work!
Art Coley leads CGI Franchise. Founded in 2015, CGIF has been helping franchise companies implement and execute repeatable and sustainable recruitment systems for more than two decades through the Recruitment Operating System. Based in Temple, Texas, CGIF works with brands worldwide. Contact him at 281-658-9409 or firstname.lastname@example.org.