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Franchise Industry Added 300 New Concepts In 2006

Written on November 29th, 2007 by Ryan Lee in Franchise Industry.

More than 300 small-business concepts adapted the business-format model of franchising in 2006, providing evidence that the industry’s growth continues its upward spiral, according to a report issued by the International Franchise Association’s Educational Foundation. Conducted by FRANdata Corp., the “Profile of Franchising: 2007” also reported that the industry is steadily diversifying in the United States.

Nine hundred new franchise concepts were launched in the three year period from 2003 through 2005. The Profile series’ tally shows that there are now more than 3,000 established franchise brands which span 230 different lines of business. The report also documents an increasing number of concepts outside of the food-service category.

All totaled, franchise companies added nearly 30,000 new establishments to the U.S. economy in 2006, for an average increase of 4 percent in overall establishments between 2005 and 2006.

While the fast-food service category still remains the largest in the industry, the services category has experienced the largest increase in the number of new concepts. This category is composed of health and fitness, publications, and security and consumer services franchises. Health and fitness concepts experienced a 156 percent increase in the number of establishments between 2000 and 2006. Commercial and residential cleaning concepts remain the category’s largest segment.

Other categories within franchising, such as building, real estate, child related and maintenance services are also gaining large numbers of new concepts. The retail store category declined slightly over the period 2000 to 2006, measured by the relative number of franchise concepts. However, this category still experienced a 21 percent increase in the number of new establishments, driven mainly by big increases in computer stores, florist businesses, and retail clothing stores.

Other key research about franchising is on the way. In January, the foundation plans to release the second edition of its “Economic Impact of Franchised Businesses” prepared by PricewaterhouseCoopers that measures the job creation, payroll, and economic output generated by the franchising industry in the United States. The 2004 edition, based on 2001 economic data, revealed that there were an estimated 760,000 franchised establishments creating jobs for more than 18 million Americans and generating $1.53 trillion to the U.S. economy.

One Response to “Franchise Industry Added 300 New Concepts In 2006”

Questions to Ask Before Signing the Paperwork | Franchise Ultra Lounge - Franchise Social Network Left at 1:34 pm on December 6th, 2007
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