How do you create a recession-proof business? Learn what you need to do to plan ahead for pandemics and other financial downfalls, so your business can still succeed.
Recessions are almost impossible to predict with perfect accuracy, but certain businesses stand a stronger chance of weathering an impending storm. Industries that trade in luxury and big-ticket items like automobiles most commonly face greater challenges during times of economic downturn, when consumers are watching their spending more carefully.
Healthcare, home improvement, and food and beverage are all considered recession-resistant industries, providing fundamental goods and services that are in demand regardless of the state of the economy. While there is no such thing as a truly recession-proof business, industries that provide necessities and even items that may be considered small luxuries are positioned to maintain and even grow their business during challenging times. Coffee covers both categories for many consumers: a necessary morning boost and a flavorful indulgence.
Competition between businesses may become heightened during a recession or pandemic, as owners strive to position themselves at the front of the line. One way you can distinguish your business from others is by offering something your competitors don’t have, even within a broader category like coffee. Your business can’t rely on one specific product or one type of customer. Recessions can be unpredictable, so you can better prepare your business by diversifying revenue streams. Every sale counts during a recession, so broadening your scope improves your ability to attract more business.
One way Scooter’s Coffee® remains a recession-proof business as well as a leader in the overall coffee industry is our commitment to a versatile, exciting menu that offers something for everyone, no matter the time of day or season. We built our reputation on the quality of our drinks. Our team is constantly working to develop new hot, cold, and blended drinks that are on the forefront of taste trends. By creating new, exciting options, we’re able to keep our menu fresh and customers interested in what’s coming next.
During a recession, more than ever, it’s important for businesses to do whatever they can to stay top-of-mind for customers. Recessions tend to be stressful times for everyone. With so much stress to distract, it’s easy for a business to get forgotten or lost in the shuffle.
For many businesses, this means bringing their business online in a meaningful way. Customers will appreciate feeling engaged through limited-time offers, seasonal promotions, and loyalty benefits.
During a recession, it’s important for your business to not only focus on attracting new customers, but to invest in the relationships you have already established with regulars. It is often said that 80% of a business’s profits come from 20% of your existing customer base, so a recession is a key time to retain your loyal base.
When running a recession-proof business, consider the cost of keeping your business open. Operational costs during a pandemic or recession can quickly become overwhelming if you find yourself unprepared. A flexible business model that allows you to adapt to the operational limitations imposed by a pandemic or the fluctuating needs of customers during a recession will carry you through leaner times.
For example, Scooter’s Coffee has been prioritizing efficiency since opening our first drive-thru kiosk back in 1998. The simplicity of the Scooter’s Coffee business model has supported the success of franchisees through all seasons, and even a global pandemic. Our drive-thru kiosks operate with low overhead and a smaller footprint, making Scooter’s Coffee an ideal recession-resistant investment opportunity.
Owning more than one property is a viable option for many business owners, even during a financial downturn. Multi-unit owners are still involved in the day-to-day business of their stores, but they can shift focus toward growing their network of locations. Operational tasks are often delegated to managers and other senior staff so that the owner’s concentration can be on scaling their business.
There are certain economic and efficiency benefits to owning multiple stores, particularly within the same market or brand. In addition to generating more income, many multi-unit owners appreciate the revenue diversification that comes with managing more than one franchise location. Owning multiple franchises can sometimes mean a safer investment, since you don’t depend on a single site to make all the revenue. In many cases, expenses can be shared across locations, streamlining various business concerns such as product distribution and marketing.
Scaling a business through multi-unit ownership provides different sources of revenue as you grow and leaves you better prepared to face unforeseen economic calamities.
Since its inception, Scooter’s Coffee has been ahead of the caffeinated curve, appealing to both customers and franchise owners with a concept that promises, “Amazing Drinks, Amazing People…Amazingly Fast!” Among other accolades, Scooter’s Coffee was named one of QSR’s Top 10 Franchise Deals for the second year in a row and a Top Emerging Franchise by Franchise Gator for the third year in a row. Even during a global pandemic, Scooter’s Coffee reached the major milestone of opening its 300th store at the end of 2020, well on track to have 1,000 locations in operation by the end of 2024.
We attribute our success, through good times and bad, to our commitment to efficiency, quality, and growth. Scooter’s Coffee bolsters its franchisees with comprehensive support. From immersive training to real estate and construction assistance, integrated marketing campaigns, product innovation and more, Scooter’s Coffee is fully invested in the sustainable success of its owners.
Scooter’s Coffee is the country’s leading recession-resistant coffee franchise, having established a record of consistent growth through some of our most challenging downturns. In terms of same-store sales growth, 2020 found Scooter’s Coffee drive-thru kiosk locations experiencing 31% growth, with the top quartile experiencing an average unit volume of just under $1 million. * Even amidst the lockdowns and dine-in restrictions presented by COVID-19, the quality and convenience that Scooter’s Coffee provides is unmatched.
Our delicious coffees, smoothies, and tasty treats are all delivered with a smile, keeping customers coming back. Our innovative franchise model is what attracts both new and seasoned entrepreneurs to invest in our winning brand.
You can request information to learn more about franchising opportunities with the fastest-growing brand in the nation’s $48 billion coffee industry.
*This is historical representation of what some of our franchisees have earned as described further in Item 19 of the Franchise Disclosure Document. This information is based upon the top 31 of 126 Drive-Thru Kiosks that were open during the entire 2020 calendar year and provided complete information. Of these 31 Drive-Thru Kiosks that compile the top quartile: (1) 13 of them (or 42%) had an AUV that met or exceeded $993,790, (2) 13 of them (or 42%) had a Net Profit Margin that met or exceeded the average. and (3) 15 of them (or 48%) had an EBITDA that met or exceeded the average. Your results may differ. There is no assurance that you will sell or earn as much. See Item 19 of the FDD for more information.