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Investors
Leaving Wall Street for Main Street? 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 speculator himself. "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. Franchise developers 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." Christopher Simnick, 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…and 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."
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