Magazine article Black Enterprise

B.E.'S 25 Most Affordable Franchises: Recession-Resistant Industries and Low Startup Costs Make These Opportunities Our Top Picks

Magazine article Black Enterprise

B.E.'S 25 Most Affordable Franchises: Recession-Resistant Industries and Low Startup Costs Make These Opportunities Our Top Picks

Article excerpt

"IT'S REALLY ALL ABOUT THE KIDS," says Dawna Kelly, owner of an Abrakadoodle art education franchise in Canton, Michigan. "The light that's in their eyes when they know they've created something on their own--it's a sight to see."

Using materials, training, and curriculum developed by the franchisor, Dawna and her four-person team serve children from 20 months to 12 years old in the Detroit metro area by contracting with community centers and schools. Dawna's clients include all the elementary schools in Belleville, Michigan; the Redford Community Center; the Summit Recreation Center in Canton; and Focus Hope Center for Children.

Business is better than expected, says Dawna, who with her husband, A1, came up with the $65,000 franchise fee and working capital requirement by pooling their savings and taking out a small business loan. It's been money well spent. Launched in May 2007, the franchise generated roughly $100,000 its first 12 months in business. Moreover, Dawna expects to double annual revenues to $200,000 and increase the number of teachers on staff to eight.

"A lot of schools are actually de-emphasizing art education," says the 40-year-old Spelman graduate. "They're taking art out of the classroom because of budgetary constraints. I thought 'What an opportunity to partner with schools who want to bring art back on a smaller scale, or for parents who still want to provide art to their child through the community or recreation center.' Art is incredibly important because it teaches a child how to be creative. We emphasize creativity in our classes."

Dawna's franchise is in one of the healthier sectors of this otherwise ailing economy, and there's a genuine need for her service. Since it's rare to find a stay-at-home mom or dad these days, daycare and recreation centers have become hubs for supervised youth activities. And when state and city budgets get slashed, public school arts programs are often the first to be cut.

Like Dawna, a growing number of entrepreneurs have jumped into franchise ownership in sectors that are poised to flourish in these tough times. For that reason, BLACK ENTERPRISE has identified the most affordable franchises in these industries. Our editors consulted with franchisors, franchisees, industry experts, and trade associations to come up with 25 lucrative franchising opportunities. We gave extra consideration to franchises with minority outreach programs, and to the many that participate in the MinorityFran initiative of the International Franchise Association, the industry trade group in Washington, D.C. MinorityFran works to broaden awareness of franchising within minority communities and to increase the numbers of minority franchise owners, employees, and suppliers.

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FEEL THE HEAT

The franchising sector is as prolific as ever. The total number of franchised business locations in the U.S. now exceeds 900,000, creating some 21 million jobs and $2.3 trillion in total economic output, according to the IFA, which also states that franchising accounts for about 11.5% of the entire U.S. economy. And the current economic environment has made this business sector a viable option for aspiring entrepreneurs. "When traditional investments--either equity markets like the stock market or investments like real estate--don't perform as well as they did in the past, people start to look at other places to put their money," says Matthew Shay, IFA's president. "That makes franchising a more attractive alternative as well."

Rising unemployment also contributes to the sector's growth, as laid-off workers create their own jobs through entrepreneurship. "People who have been downsized, right-sized, outsized--voluntarily or involuntarily--have in many cases turned to franchising as a way of securing their economic future," says Shay.

But the world of franchising is large. Where are the hot spots? …

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