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Franchise Business Outlook for 2016 Report Shows Franchise Growth Surpassing Other Businesses

The report from the International Franchise Association said franchises are outperforming other businesses among the entire economy.

By Nick Powills1851 Franchise Publisher
SPONSOREDUpdated 8:08AM • 01/21/16
The Franchise Business Economic Outlook for 2016 report from the International Franchise Association (IFA) found that economic growth among the franchise sector surpassed the rate of growth for non-franchise businesses among the entire economy. The improvement for the franchise industry is in part thanks to consumer spending and employment expansion. According to No Limit Agency* Chief Brand Strategist Nick Powills, the unique approach franchises take to business has been one of the keys to their success.

“Franchises thrive because of the investment into growth. Local chains don’t rely on others to grow; they decide in a board meeting or through a growth strategy to open another location,” Powills said. “In franchising, growth is primarily ruled by the locally owned and operated. There are more people wanting to open businesses not by themselves but for themselves.”
 
 
Job growth was one of the key catalysts sparking the franchise industry’s improvement. Here are a few growth highlights from the IFA’s report: 
 
  • Franchise employment was up 3 percent in 2015
  • The industry added 278,000 jobs in the process, bringing the total to 9.1 million
  • The rise in 2015 outpaced the five year average of 2.6 percent and is almost 20 percent higher than all economy-wide businesses.
 
 
 
Ardag Tachian, director of development for MOOYAH  Burgers, Fries & Shakes, said people tend to invest in franchises because they provide a career that is easy to pick up.
 
"People tend to gravitate to franchising, especially during tough economic times because it offers them a scripted, more proven business opportunity," said Tachian. "We may be seeing more job growth and franchise businesses opening because of uncertain economic times."
 
The addition of jobs in franchising has fueled the growing number of franchises and subsequent location openings. The proof is in the numbers—franchise establishments grew by 1.7 percent in 2015, adding a total of 13,359 new units, which boosted the total to 795,932. IFA President and CEO Robert Cresanti said the sustainable business model franchises provide is one of the reasons for the job growth.

“Franchise businesses are showing tremendous capability to provide new jobs for working families and new businesses for first-time business owners across all sectors in local communities, despite the fact that franchisees are facing many new regulatory threats at all levels of government,” said Cresanti in an IFA press release about the report. 
 
 

The growth over the past year is helped by consumer spending, which increased 3.1 percent in 2015 and is projected to maintain that steady pace with a 3 percent growth in 2016. Powills believes franchises will continue to outpace other businesses.

“When you have more and more franchisors hungry for growth, more and more dollars will be spent to lead more and more franchisees into franchising,” Powills said. “As long as franchisors continue to invest in the growth of your brands, franchising will lead business in America — and eventually, the world.”
 
Infographics courtesy of the International Franchise Association 

*This brand is a paid partner of 1851 Franchise. For more information on paid partnerships please click here.

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