Kreiss

Kreiss on Fox News

Dec. 1, 2010

Necessity is the mother of invention, and that is especially true for small businesses in the midst of a recession.

Some Businesses See Bad Economy as Chance to Find an Edge - FoxNews.com

Necessity is the mother of invention, and that is especially true for small businesses in the midst of a recession. To stay afloat in this economy, small and large businesses alike have had to get creative to exist let alone make a profit.

For some franchises and chains, however, the recession has been a boon. Operations like Souplantation and Kreiss Furniture have figured out that a dip in the national economy might have its advantages, like cheaper rent and lower construction costs, as much as 20 to 30 percent in savings when it comes to opening store fronts.

"We've used this opportunity to get in locations where we wouldn't able to be otherwise," says Loren Kreiss of Kreiss Furniture. "We've drastically reduced our rents and really you don't see a furniture store in a high end retail mall, and it's really given us a lot more exposure."

Retail experts say there are two ways the recession helps companies.

"One is, the costs are coming down," says Vish Krishnan of UCSD Business School. "Second, they are able to have greater access to those choice, you know prime trophy locations that are very crucial for attracting demand."

According to Krishnan, franchise businesses have this advantage of being a more scalable service than a regular mom and pop shop. So in an environment when costs are coming down, franchises have room to scale up so to speak.

And the folks who run Souplantation say that has been a recipe for success for them. CEO Michael Mack says the downturn in the economy has been a real incentive for them to figure out how to branch out.

"We created a smaller prototype which is far more economic for us," says Mack. "We're also promoting some of our products in Costco and other retail channels which is another way for us to do the same thing."

Even in Las Vegas, which is experiencing high unemployment and a record high number of foreclosures in the real estate market, franchises are pouring in. Several new yogurt stores and clothing outlets are coming soon.

Franchisees say, the recession has been the "in" they've been waiting for to take advantage of getting into the market on the cheap. No better time, they say, to roll the dice

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