According to the International Franchise Association’s 3rd Quarter Franchise Forecast for 2013, in a troubled U.S. economy, the franchise sector is booming. In fact, the franchise industry has added 184,000 jobs over the past 12 months. Here are some of the main highlights contained in the report.
- Franchise businesses have been a huge contributor to job growth recently. In fact, of all the new jobs that have been created over the past 18 months, around 10 percent are in the franchise sector, boosting the total number of jobs in the industry to more than 8 million (with the franchise sector directly and indirectly supporting more than 18 million jobs overall). Industries that have seen significant job growth in the past year include business and personal services, restaurants, automobile, education, and manufacturing.
- Projections for the franchise industry’s immediate future are strong. In fact, in 2013 the franchise sector is expected to grow twice as fast as the rest of the economy.
- Several sub-sectors in the franchise industry are seeing new opportunities. With the aging of Baby Boomers, there is a growing demand for companion care, assisted living, in-home care, and transportation services franchises. New versions of the fast food model (such as food trucks) are seeing significant growth as well.
- The franchise sector has gone international, which has contributed to its growth. In fact, there are more than 400 U.S. franchise systems that are operating on an international scale. In many foreign markets, U.S. franchise brands have become symbols of quality, service, and value.
- There is a strong emergence of women and minorities in franchising. This is because the business of franchising provides a means to overcome traditional obstacles faced in business in terms of business model development and capital. Since the franchisor has already perfected daily business operations through trial and error, new franchisees can avoid many common start-up mistakes. Most franchisors additionally will offer ongoing training and assistance.
- Technology is playing an increasing role in franchise success. Tools such as the Internet and mobile devices can not only help streamline operations and increase efficiency but also provide a simple and effective way to reach customers through marketing and advertisements.
To date, there are actually 75 industries that have operations within the franchising business format. The IFA network includes around 1,000 franchisors, 350 suppliers, and more than 7,000 franchisee members.
Harrington, Kevin. “The Biggest Trends in Franchising.” Forbes. 10/31/13.