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Franchise Law Update Commentary on Business and Legal Issues of Franchising

Signs of an Accelerating Recovery for Franchising in 2012?

Posted in Business Updates

Contributed by Liz Sigety

IHS Global Insight recently issued a report for the International Franchise Association Educational Foundation forecasting modest overall growth in the franchise industry.  The report states that this growth has been stunted over the past three years for reasons reflecting the overall business climate such as weak consumer spending and tight credit.  This growth is predicted to impact  the franchise sector in 2012 through the increase in the number of establishments (1.9% to 749,499 establishments), employment (2.1% to 8,102,000 jobs), economic output (5.0% to $782 billion) and gross domestic product contributions (4.8% to $460 billion ).  The report says that this is consistent with the overall outlook for the economy.
 
Personal services franchises are expected to lead this growth with 6.2% in output growth followed by retail products and services and real estate.
 
Nonetheless, IFA President and CEO Stephen J. Caldeira notes that "the rate of growth is far below the growth trends we experienced before the recession.  Pro-growth policies out of Washington, D.C. to provide certainty to the franchise industry…will help to get us on a more aggressive path of growth and job creation."
 
You may view the report here.  In addition, the franchise growth trend has been highlighted in many prominent publications.  For further reading, we suggest: