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The GDP Fell 9.5% in Q2

But the news is not all bad for franchisors.

On Thursday, the U.S. Commerce Department revealed that the country’s gross domestic product fell by 9.5 percent in the second quarter of the year, losing about $1.8 trillion. As the New York Times points out, that loss is the steepest since the advent of modern economic statistics. 

A report from the Labor Department, also released Thursday, doesn’t inspire any more confidence, showing an additional 1.43 million new unemployment claims in the last week alone.

Naturally, consumer spending is also down — by a whopping 10.1 percent in the second quarter, according to the Commerce Department — which is bad news for businesses across sectors, including franchise brands, many of which are continuing to struggle with shutdown orders that were widely expected to be lifted by this point in the summer. 

With franchise brands competing desperately for their share of rapidly shrinking consumer spending, some franchisors may be inclined to panic, but there is a bright spot for the industry amid these dire circumstances: historically, franchises grow during periods of heightened unemployment. 

Right now, franchisors have a wider pool of talented and experienced potential franchisee candidates than perhaps ever before, and many of them are eager for an opportunity to take control of their careers. 

While most franchisors are understandably tightening their belts in anticipation of a long road to recover, now may be a uniquely lucrative time to invest in development.