In a welcomed bit of good news, the International Franchise Association (IFA) reports in the 2011 Franchise Business Economic Outlook that 2011 will be a rebound year for franchised businesses. Projected growth will come in the number of establishments, jobs and economic output in the franchise industry.
Other interesting projections and stats from the report:
- The number of franchise establishments: Projected to go up 2.5 percent in 2011 from an estimated 765,723 to 784,802
- Number of direct jobs: Up 2.5 percent from an estimated 7,614,000 to 7,808,000, creating 194,000 new jobs
- Economic output: Gross value of goods and services a business produces projected to grow 4.7 percent or $33.3 billion from an estimated $706.6 billion to $739.9 billion.
- Business format franchises With the exception of Business Services, the number of establishments in each business format franchise line is projected to increase in 2011. The largest gains are expected in Lodging (4.4 percent), Automotive (3.9 percent) and Retail Products and Services (3.9 percent).
Why is this good news?
It’s great for the country as a whole – growth in franchised business strengthens the economy. A projected 3 percent growth in global gross domestic product (GDP) and economy-wide employment projected to grow by 2.4 million jobs means increased consumer spending and the expansion of franchised businesses.
Ok, what’s the bad news?
Franchised businesses will continue to struggle with accessing sufficient credit that would enable business expansion and job growth. Franchisors and franchisees say the tight credit market has severely limited the ability to expand business. Nearly one-third of franchisors report that more than half of their franchise prospects and current franchisees were unable to get financing in the last year.
If you’ve been thinking of opening a franchise or looking for a good franchise opportunity, 2011 might be a good year to do it. FranNet is the leader in franchise consulting and can help you find a perfect franchise fit for your life. Call toll free: 1 -800-FRANNET or log on to www.FranNet.com.