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Is Your Franchise Seasonal?

 

When I first set out to write this post, it had appeared as if fall had officially arrived in Indiana; the leaves have changed color and are barely holding onto the trees and the temperature dropped to a brisk fifty degrees or so, for about a week.  But in true Indiana weather fashion, this first week of November is supposed to be unseasonably warm, with the high temperature rounding out around 72 degrees every day.  Not unlike Indiana weather, sales and profits of businesses and franchises can be unpredictable and even volatile at times, which can make it difficult to plan accordingly to cover all of your expenses.  This is why it is extremely important to ensure that you have a reasonable reserve of funds or access to capital, especially when you are first starting out.

Some businesses and industries are inherently seasonal, such as landscaping, construction, tax services, and retail stores whose products and inventory change with the seasons.  Other businesses can experience seasonal fluctuations as well, even if they are not traditionally thought of as being a seasonal business.  This is something to keep in mind when you are considering purchasing a franchise.  Knowing whether or not the business experiences its own version of high and low seasons, and understanding the reasons behind the fluctuations, allows you to more adequately plan for the slow season.  It is important to remember that you will still have to cover your general expenses and pay the franchisor all of the various fees you are responsible for, even during the slow season.  Discussing this topic with current and former franchisees can give you a better idea of what to expect in terms of the cyclical nature of the business and how other franchisees survive and thrive during the slow season.