Many Australian businesses, but from all accounts a lesser percentage than in most other countries, may regard 2009 as a year they will not, in the Queen’s words, look back on with undiluted pleasure. The Queen had her own annus horribilis in 1992 when three of her four children divorced or separated (and, as Wikipedia reminds us, scandalous pictures of a topless Sarah being kissed by a friend were published in the tabloids).

For quite different reasons business worldwide has had its own annus horribilis in 2009. Of course for those lucky enough to have good jobs, motor vehicles and mortgages it has not been all bad and there will no doubt come a time when those of us in that position look back nostalgically on the interest rates, the petrol prices, the airfares and the sales we are enjoying now.

From the security of my superannuated office it is easy to make big statements as to the state of the nation but there are nevertheless clear indications that Australia escaped the worst of what the global financial crisis (GFC) threw at us, that we are poised for recovery and that the GFC impact on franchised business has not been as great as on non-franchised sectors.

As this column is being written in early October, the media headlines are encouraging: Retail recovers as sentiment surges, Consumers upbeat, Sharemarket surges are just some examples.

Your balance sheets will nevertheless tell the story much more eloquently and realistically than the headlines, and inevitably there will be both good and not so good stories. The fact that Australia has technically escaped recession of course provides little comfort to those who have suffered economically.

There is nevertheless strong evidence to suggest that that franchising has outperformed other sectors during the downturn. Some companies have indeed thrived under these conditions. Domino’s Pizzas for example has reported strong earnings and profitability rises and a higher level of store openings, and there are many such other examples.

The PWC Franchise Sector Indicator published in September suggests that The franchise sector is continuing to grow during the economic downturn, reflecting the strength of franchising as a business format. The report notes that the sector had achieved revenue and profit growth over the last 12 months and franchisors predict profit growth of 18 per cent in the next 12 months.

A recent British Franchise Association and NatWest Survey also recorded that There is little indication so far of the recession having a severe impact on the franchise industry. It seems franchised businesses are in a much stronger position as they have the protection of a proven business model and brand.

The survey found that 90 per cent of franchise owners surveyed reported profitability, a comparable level to the previous year’s 91 per cent.

The performance of the franchise sector during the downturn is a strong endorsement for the franchise model. In fact, it is during such times that the credentials of franchising are best demonstrated.

Franchising works because of the unique value drivers it enshrines – the power of brands, proven business models, networks, training and ongoing support and these are most clearly demonstrated when times are tough.

For me, and for any prospective franchisee, the most impressive statistic in the aforementioned report is the response of franchisors to the downturn. The report records that Instead of slashing marketing budgets, cutting staff numbers or delaying capital expenditure, franchisors have proactively bunkered down with franchisees to weather the storm. Three of the top-four initiatives implemented by franchisors to address the challengers of the economic downturn entail working closer to and assisting franchisees.

The phrase annus horribilis is apparently derived from the phrase annus mirabilis – year of wonders. It would be great if in writing this column next year I could reflect on an annus mirabilis.

At this stage I suspect many would settle for an annus okis.

Andrew Terry, Australian School of Business at UNSW and consultant to DC Strategy.