Leaving Wall Street for Main Street?
By: Alison S. Glassman of FranchiseOpportunities.com
Seems like just yesterday
everyone was getting rich on the next "big thing." Stock advice
was everywhere and no matter how you invested, as long as you were not
a short seller, you made money. Well, those days are gone and many who
invested their life savings in a now-popped bubble are singing the blues.
It seems everywhere you turn there are horror stories from investors who
got caught in a market they never expected and to a large extent, should
never have invested in the first place. "The unfortunate thing about
stocks is how they are portrayed to the average non-financial person,"
said Joe Lunsford, President of FranchiseOpportunities.com, an online
franchise advertising portal and information website, and a previous market
"When you hear
about a fund or a stock that goes up 50% in a short period of time it
makes you feel like you were the only one who missed it. I think it is
one of the biggest frauds perpetrated against the average American. Taking
select periods of time and suggesting that if one had invested on a certain
day you would have made this much, which is ridiculous, considering practically
no one actually invested and sold on those said dates. But since greed
drives us all, it creates demand and fuels the growth of American business
by creating interest in funds and stocks that often under perform in the
following months or years." He goes on to add, "World capital
markets are built on the backs of the unknowing and unwitting who do not
realize this self promotion is actually marketing disguised as news and
these are the people who can least afford it."
It is an interesting,
yet true phenomenon that during this market downturn and economic recession,
consumer spending has remained relatively bullish during the blood bath
that has taken place on Wall Street. According to history, when the stock
market dives and people are laid off from upper management, the franchise
industry flourishes. This growth in franchises is due to those individuals
who have managerial experience, disposable income and are not even remotely
prepared for retirement.
and owners echo these same sentiments about investors being fed up with
the stock market, as they see the trends firsthand. Russ Smith, VP of
Global Development at Planet Beach (a global tanning salon franchise)
has been in the franchising industry for over 18 years. Smith claims,
"The increase in franchise acquisition is obviously a trend. People
aren't investing in the market like they were two years ago. In the industry,
people are taking their money out of stocks and putting it into something
viable and solid. Franchising offers that solution."
Smith added, "This
is the most exciting time for franchising. Over the next five to ten years
there will be substantial growth for two reasons. One, franchising has
proved to be a solid investment and two, because we will find that 'baby
boomers' are looking into buying a 'second career.' They want to plan
for their future without being under the weighty thumb of corporate life."
VP of Franchise Development for Sign-A-Rama, echoes the sentiments of
his peer when asked if he notices an increase in franchise units sold
as stock market investments decrease. "After being with Sign-A-Rama
for over 22 years, I have noticed an unbelievable upswing of franchise
acquisitions - especially within the past two years. I've already surpassed
more franchise sales this year, than any other year of the company's history
I still have two more months to go!" exclaimed Simnick. Simnick continues,
"You can't argue with fact. People just aren't making the 20-30%
that they used to make from their stock investments. Where stocks used
to be considered as 'untouchable,' people are now facing the choice of
either going back to the corporate world, or using their stocks as investment
capital for franchise acquisition."
Lunsford, an advocate
of franchising for more than 20 years, also witnesses this trend in franchising
and its franchisees. " The face of franchising is changing and we
are seeing more and more investors buying franchises who never intend
to spend one day at the store. They simply create a corporation and hire
a manager to perform the daily duties."
This new class of franchisee has grown into the large majority of those
buying franchises. Lunsford and the team at FranchiseOpportunities.com
have affectionately characterized this type of franchisee as a "Franchise
Investor" and the number of these investors continues to grow as
the Market continues to unpredictably vacillate. So, will franchising
be the Main Street that replaces Wall Street? Only time will tell.
For more information contact:
Alison S. Glassman