How Hand & Stone Adjusted to the New Economy

Bob McQuillan, Vice President of Franchise Development for Hand & Stone

Over the past two years, the state of franchising has changed quite a bit. Positively, a new report just released by the U.S. Census says that 10.5% of U.S. businesses are franchises, which indicates a large percentage of people are still continuing to turn to franchising. However, the tightened credit crisis has been the main contributor to the change in the franchising industry, but Hand & Stone is doing some innovative things to keep growing amidst a tough economy.

From the franchise level, we’ve gone back to basics. We are developing and leveraging strategic relationships in the franchise industry to help foster the growth of our business. We are turning to business coaches (franchise brokers) to help bridge the relationship with prospective franchisees, and we work very closely with them to get their clients into our system.

One of the negative effects of the economy has been the ability for a franchisee to get financed in a new business. We (the franchisor) are pulling out all the stops for franchisees – leasing arrangements, home equity loans, and 401k rollover programs are some of the ways that we are helping aid first-time business owners in the process, and thus, we’ve been fortunate to recruit a very sophisticated group of franchisees.

Additionally, Hand & Stone is experiencing a very positive effect from corporate America down-sizing, as we are seeing more qualified prospective franchisees with a very sophisticated set of skills that enables them to be a perfect fit for our type of business. As companies continue to offer early retirement packages or downsize their current workforce, companies like Hand & Stone will be a good place for them to turn to and utilize those skill sets.