So it seems you can't go more than a few seconds these days without news that the economy is sputtering endlessly out of control. In what has been some of the most trying times in recent memory, many companies continue to ask for bailouts, cut losses, trim staff, tighten inventories - add your own economically depressing descriptive statement here.

So how is it that two highly respected franchisors - Baskin-Robbins and Sylvan Learning Centers - have announced plans to expand operations in the metro Atlanta area? 

Ask Salman Siddiqui, vice president of franchising and development for Baskin-Robbins, and he'll tell you it is just part of the neighborhood ice cream chain's aggressive growth strategy. That's right. Baskin-Robbins opened more than 600 stores globally in 2008 - the highest single-year unit increase in the company's 62-year history. What bad economy?

With more than 2,700 locations, Baskin-Robbins' Atlanta launch is part of a plan that includes expanding in existing markets while continuing its emerging growth in new territories across the country.

"[In Atlanta], we are looking to increase our presence by double digits over the next several years throughout the city and the surrounding counties of Dekalb, Fulton, Cobb and Gwinnett, among others," Siddiqui says. "Baskin-Robbins currently operates four locations in and around Atlanta and 35 stores across Georgia.

"Based on a strategic assessment of inventory opportunities across the United States, we determined that the brand has the potential to significantly increase its footprint and began implementing its growth plan in 2009 to achieve this goal," he adds. "The expansion is part of an aggressive growth strategy, which includes expanding in existing markets including California, Florida and Texas, while continuing the growth in emerging markets such as Georgia, North Carolina and Indiana, to name a few."

As part of its strategy, the company is seeking new multi-unit, large-area developers to join its family. Siddiqui says this is an expansion of its current small-business small-network program, which focuses on identifying franchisees interested in a minimum three-store commitment.
The company also has started a large area developer program exclusively for developers looking to build 10 or more stores. Baskin-Robbins offers a 31-store large area development agreement to celebrate its 31-flavor heritage. The brand has now opened up even larger geographic areas for developers/investors looking for even greater growth opportunities. Scalability is the program's most attractive feature.

Interested franchisees can expect their initial investment to be approximately $185K-225K per location, plus a franchise fee ranging from $20,000-$35,000, depending on the design concept purchased (platinum - 1,700-2,000 square feet; traditional - 800-1,200 square feet; and non-traditional - 200 square feet). Typically, most Baskin-Robbins locations can be built and opened  in  under  six  months  depending  on the real estate selected.

And while Siddiqui says the economy is presenting challenges, more than 300 million people visit Baskin-Robbins each year, or 3.7 million people per week. That's good enough to rank 17th in Entrepreneur magazine's annual Franchise 500 ranking. 

The need to learn

At Sylvan Learning, the franchisor is making exceptions in this tough economic climate when it receives an offer from a qualified operator with limited access to capital. Why expand? In 2008, franchise sales grew more than 150 percent.
And despite the challenging economy, Sylvan Learning sold a total of 94 domestic franchise territories in 2008 compared to 37 territories in 2007, says Curt Hapward, Sylvan Learning's vice president for franchising.

Hapward says that potential franchisees are obtaining funding through banks, personal finances, private investors and/or, in limited circumstances, Sylvan provides a promissory note to qualified operators. Sylvan still maintains good relationships with banks that, in most situations, continue to loan money despite the economic environment.

Sylvan sells protected territory rights to franchisees and that "qualified" franchisees must have the characteristics, background, community outreach spirit/commitment and financial requirements needed. Candidates should possess a minimum net worth of $250,000 and minimum liquidity of $75,000.

The company recently launched an aggressive national expansion plan to convert its corporate centers to local franchisees. "While we continue to expand throughout North America and the world in new and existing territories, we are also expanding through our online consumer education offerings," Hapward says.

Sylvan recently sold six Atlanta area company-owned centers to a franchisee, as well as two undeveloped territories. "We continue to search for local entrepreneur(s) to purchase the remaining five centers and possibly additional territories," he says.

Sylvan currently operates nearly 1,200 centers in 49 states in the United States and six provinces in Canada. In 2008, Sylvan Learning was ranked number 57 in Franchise Times magazine's "Top 200 Systems."

"[Overall] this time is a good time for franchising opportunities, but mostly for those types of businesses that prosper in a down economy," says Alisa Pittman Cleek, chair of the Hospitality Practice at Elarbee Thompson. "Restaurants and specialty food franchises similar to a Baskin Robins have overall been effected negatively in this economy.

"I would expect this is a tough time to enter the market in that franchising area," she adds. "Potential franchisees must keep in mind that an ice cream franchise is a seasonal business in most geographic areas in the United States. Thus, potential franchisees need to look at how the franchise performs in the off-season."

While there has been an increase in students entering college or executive education programs, Elarbee Thompson has not seen a similar increase in learning centers focused on earlier education.

Says Pittman Cleek, "While a potential franchisee should proceed with caution, this type of franchise should be less risky than a seasonal food specialty franchise."