Contact Us

Oregon Office:

Douglas D, Smith

PO Box 1034 

Sherwood, Oregon 97140-1034

Phone: (503) 840-0000

 

Utah Offices:

Bradley D. Smith

FranchiseSmith Utah, LLC

5508 West Kensington Circle

Highland, Utah 84003

Phone: (801) 615-1564

 

Douglas D. Smith

Franchise Smith, LLC

201 Red Pine Drive #4

Alpine, Utah 84004-5618

Phone: (503) 840-0000

 

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may or may not reflect

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developments and new 

business practices. It is

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of the attorney-client

relationship and is not

intended to be legal

advice or a substitute

for obtaining legal advice

from an experienced

franchise attorney 

related to your specific

needs and circumstances.


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Recession, Financing and a recent Oregon Experience

September 5, 2011

 

Thanks to my good friend Greg Hansen for sending me a July 24, 2011 article from the Eugene Oregon Register-Guard that augments my blogs of August 9 and September 5. Here are some highlights from the article entitled "Making a go of it with a franchise -More Americans are choosing an investment in ownership" by By Saul Hubbard and Brian Davies:

 

... . [A new franchisee based in Eugene, Oregon]  opted to pay the approximately $200,000 in start-up costs [for his new franchise purchase] out of his own pocket because of the difficulty he had in finding financing. “It’s so tough right now to find those borrowing funds,” he said. ...

 

Industry experts expect 2011 to be something of a bounce-back year for franchising, after a loss of almost 30,000 individual franchises nationwide during the depths of the recession in 2009 and anemic franchise growth in 2010. ...

 

This year, the number of franchises across theUnited Statesis expected to grow by 2.5 percent, to 784,802, according the International Franchise Association. Limited credit availability for small businesses remains a major stumbling block to a faster recovery, said Alisa Harrison, a spokeswoman for the association, which has been lobbying inWashington,D.C., this year for some of the postrecession bank lending regulations to be loosened. “During past recessions, (the franchising industry) has done quite well,” she said. “But credit is so tight right now, it makes things difficult. ... Still, this year is going better than last year.”

 

The article goes on to establish that because of the current difficult credit market  "franchises which require a lower initial investment ... are seeing more growth than the more traditional but more expensive... ." Many franchise purchasers are "using some savings and some equity, but very little financing.” 

 

An interesting positive impact of the current slow economy for franchise systems is that it is “a good time to expand because of preferable lease conditions and good location options.”




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