2013: Uptick in Growth Forecasted in Franchising Industry

KATE AOUEILLE Interested in business ownership? Consider franchising. The 2013 Franchise Business Economic Outlook, recently released by the International Franchise Association, shows signs of growth, signaling opportunity and promise for the new year. According to the International Franchise Association, 10,079 new businesses will be added to the industry in 2013 alone, resulting in approximately 156,000 new jobs across all business sectors in the United States. Steadily climbing from recession lows in 2008, the employment rate in the franchising industry is projected to grow by 1.9% in 2013, exceeding the 1.8% increase expected among all other businesses. The output generated from franchise establishments also illustrates signs of positive growth with an estimated increase of $33 billion dollars in 2013. “The report is good news and shows franchising remains an incredibly strong and resilient business model that generates jobs and economic growth for the American economy,” said IFA President & CEO Steve Caldeira. While the food and hospitality sector accounts for 65% of employment, the business, commercial and residential services sectors are expected to see the largest increase in job growth and establishments in 2013. Franchise businesses that fall into the commercial and residential services sectors, such as Two Men & A Truck, Molly Maid, Lawn Doctor*, and Handy Pro, will add over 350,000 jobs to the economy in 2013. Meanwhile, the quick service restaurants category exhibits the highest gain in output, with an increase of 5.2% over the prior year. Although the forecast represents a steady and positive climb in growth, Caldeira notes that recent policy decisions, such as the implementation of the Healthcare Affordable Act is causing concern for individuals in the industry. “While the report is good news, it is certainly not great news,” Caldeira said. “We could be growing at rates two to three times faster if policymakers adopted a pro-growth agenda that dealt with the uncertainty in long-term business planning facing the business community, particularly among small business owners and individual investors who continue to be threatened with the prospect of higher taxes, the onslaught of costs associated with the health care law, high commodity and energy prices, and most recently, the threat of a national minimum wage increase.”