It’s hard to read the news lately without hearing something about the demise of the middle class. Even though it’s been that way for a while, we’re only beginning to see the serious effects it’s having on the business world. This article in the NY Times discussing how businesses of all types are seeing increasing success at the high end and low end, with a decline in businesses and products that target the middle class.
What does this mean for potential franchisees? It means you need to know your local area and figure out which audience you need to be serving. Although franchises that target the upper class are not as common, there are many that target low-income audiences, and this may be the way to go as more and more people are squeezed out of the middle class. If you want to target upper class buyers, consider service franchises that cater to the needs of busy and successful people. Think dog grooming, personal concierge services, and things of that nature. High-end schools and daycares are another popular service for wealthy individuals.
If you don’t already own a franchise, you’re lucky because you can take this trend data and keep it in mind while you’re deciding how to move forward. But what if you already own a franchise? Are you totally screwed if you’re currently running a typical middle class burger franchise location? Although the article might lead you to believe the answer is yes, that’s not necessarily the case. If you’re suffering from a drop in customers due to economic trends, consider what you can do to make your restaurant or business more appealing to customers who are tightening their belts. Do you have a happy hour you can play up? What about specials that would make it easier and more affordable to take the entire family out on a budget? Often, parents avoid eating out because of the cost of kids’ meals that go uneaten, but if you can offer smaller portions or discounts in that area, you might be able to get them in the door so they’ll pay full price on their own meals.
If things continue in the direction they’re currently moving, nearly every business will have some serious adjustments to make. Readers, what’s your take on the subject? Do you think the middle class will continue to disappear? Have you made adjustments to your business to better target the upper or lower classes? Will you do so in the future? Let us know in the coments!