Black Enterprise: In Short Term, “Up to 30,000 Franchises Could Be Closed.”

Drawing from analysis released by franchise advisory firm FRANdata, Black Enterprise issued an unsettling outlook for the franchise industry on Friday, predicting that “Up to 30,000 franchises could be closed” before the COVID-19 outbreak is contained and the economy begins to recover.

Unsurprisingly, given the state-ordered dining-room closures across the U.S., the restaurant industry is poised to be hit the hardest, “with an estimated unit loss of 7,800 and 173,000 job losses possibly tied to shutdowns.”

Less talked about in recent weeks, though, is the personal-services segment, which Black Enterprise said will see an “estimated unit and job loss [of] respectively ... 7,300 and 81,000.”

According to the article, these losses could prove particularly damaging for the growing community of Black business owners.

When it comes to opening a business, franchising is where many African Americans make money. The number of black-owned franchises rose briskly to 8% in 2012 from 4.4% in 2007, research by the International Franchise Association (IFA) revealed, Black Enterprise reported in 2018.

Blacks had the biggest gain in the percentage of businesses run as a franchise within the minority, ethnic, and gender groups. Those black-owned firms grew to 4.8% in 2012, up roughly 66% from 2.9% from 2007.

Though that outlook is decidedly grim, there is no modern precedent for a crisis of this scope and nature, so every prediction should be taken with a grain of salt. We are still waiting to learn about potentially massive relief packages that could buoy the industry, and business owners are already introducing creative pivots to avoid the worst effects of the crisis.