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Franchising Works; The Numbers Prove It

Written on January 9th, 2008 by Joseph in Franchise Industry.

Franchising is the biggest area of attraction for new entrepreneurs today. Every year, more and more people are getting associated with the franchising industry. At present, it is one of the most rapidly-emerging sectors of the business world. The downslide of the dotcom industries and the corruption in corporate sectors made several investors and entrepreneurs turn away from traditional businesses. Franchising gave them a stable and profitable arena of investment. Let’s now see some recent statistics regarding this thriving industry.

• Small Business Association studies from 1978 to 1998 have found that 62% of non-franchised businesses closed within 6 years of opening, but at the same time-period, only 5% franchised business failed. A later study revealed that 86% franchising businesses opened in the last five years were under the same owner and a whopping 97% of them were still open for business.

• The latest International Franchise Association (IFA) study shows that franchising makes use of about 14% of private sector employment. Over 760,000 franchise businesses are available in the market, which have generated around 18 million jobs!

• In 2007, the total sales from the franchising industry were expected to reach $2 trillion!

• Almost 50% of all retail sales in USA and Canada are through the franchising industry.

• For every 12 newly-opened businesses, 1 is a franchised business.

• On an average, a franchise business opens up every 8 minutes in a working business day.

• If we look at industry-specific growth within the franchising field, in 2007, the quick-service sector within the food-service industry faired better than others in the group.

•From near non-existence a few years ago, medical-spas have emerged as a good bet with 33% growth rate in 2007. Baby boomers who have started to age and have good money in their hands are the biggest patrons of such spas where medical facilities such as laser hair treatment and botox are provided in a spa-like environment. You’ll find these in the health and beauty category.

•In total, 30,000 new establishments were added to the US economy in 2006 and the number is expected to rise in future as well.

• Though the food industry continues to dominate the growing sectors, some other segments are fast catching up. Notable among them are the publication and health/fitness sections. The former grew by 156% whereas the latter showed 137% growth.

• Behind them, stood maintenance franchising segment, with each sub-group having 37% to 14% growth-rate. Business-related franchises grew by 37% and real-estate by 43%.

• The two areas that doubled their unit numbers and emerged as star-performers among the fastest-developing franchising concepts were child-related franchise and service industry. Service is an industry term that encompasses things like handyman, repair and restoration and maid/cleaning.

So, if you are planning to join the franchising industry, this is the best time. Start looking for more information regarding the franchising industry. If you have any doubt or queries, you can always contact brandEXPANSION.