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Will Sandy Impact Franchising in the New York Metro Area?


The aftermath of hurricane Sandy could have serious short range implications for franchises in the New York Metro area.

As we enter the post- hurricane Sandy stage the outcome can have a direct impact on the franchise industry. Considering that Sandy hit the New York Metro area and it’s approximately 22 million people the negative economic impact has global implications.

Just prior to and after the storm certain retail establishments in the home improvement sector like Home Depot and Lowe’s have done well and should continue to do so. A number of retail analysts expect shopping malls, entertainment businesses and other businesses will be hurt by the destructive impact from Hurricane Sandy.

From a personal standpoint, having lived through the storm and being without power for 7 days, we made a point to dine out once every day. However, now that power has been restored our intent is to eat at home a bit more often than usual. In a few weeks, we’ll most likely return to our normal schedule. With a number of people in the NY Metro area having missed work, while some experienced damaged or destroyed homes we should expect a decrease in spending during the upcoming holiday season. A reduction in consumer spending will hurt franchised restaurants, hotels and other retail businesses. On the other hand franchises in the home service sector should do better than normal as people will need repairs to the interior and exterior of their homes. An additional factor that should be resolved within the next few weeks is the gasoline shortage in the NY area that has resulted in the implementation of odd/even fueling regulations. Franchisors and franchisees operating in the New York Metro area need to be aware of the post-Sandy outcome and prepare accordingly. Franchisee marketing and sales promotions should be welcomed by consumers who have endured the wrath of nature during the past two weeks.

The sale of new franchises in the NY area could suffer a bit as people struggle to get back on their feet. In terms of the future, franchisees in the retail and food sector that are located in high risk areas should consider installing a generator that will allow them to operate during a power shortage. There has been a significant increase in the installation of generators by home owners. Franchisees can take a cue from this trend.  Being in business during a power failure can enable a franchisee to maintain or increase revenues and but also earn some loyalty from existing and new customers.

© 2012 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

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