The Franchise Industry Is Poised for Even More Growth

Written on June 7th, 2008 by Joseph in Franchise News.

The rest of 2008 looks to be economically unstable. It’s not only a presidential election year, but also the economic slowdown is still somewhat persisting. The price of every product, from gasoline to daily food, is rising; and not just in domestic market, but in the international market as well. Still, the franchise industry has been growing strong for the last couple of years and will continue to do so in 2008. What’s more, it’s projected to surpass the $1.53 trillion mark this line of business had generated for the economy of the country in 2005!

The franchising industry is witnessing growth in two fronts: unit increase and the increase in number of franchise opportunities. By the second half of 2007, 143 new franchise concepts had been offering franchise business for sale, according to FRANdata. This figure is expected to grow at a steady rate in 2008 as well. As for increase in unit number, (33,000 added in 2006), this is going to get even bigger! Now, let us look into some of the main reasons that are fueling this growth:

• Due to a deadly combination of high price of oil, sub-prime loan problems and declining house prices, economy of the country is going to be sluggish this year. Hence, job market is going to get tight, forcing people to look for other options of career; starting a franchise is always better than stand-alone business, because it provides the franchisees with a number of protections. Franchising gives the proprietors a ready-made business model to work on. What’s more, the guidance of the franchisor helps them avoid pitfalls.
• Lending institutes have become more conservative regarding loans to novices and inexperienced entrepreneurs. That has made it quite difficult for newcomers to start a stand-alone business. But people interested in starting a franchise find themselves in easier situation because of the brand-name of the franchisor.
• The business itself has changed drastically over the years, encouraging more people to join this field. The trend today is towards multi-unit operators and most of the new units that are starting are owned by experienced franchisees. This has resulted in more successful franchised locations, increasing the image of the industry as a reliable career.
• The new FTC rulings have made the franchise business more transparent and free from dubious scamsters. That has prodded more cautious people to start inquiring about how to buy a franchise business.
• The weakening dollar has encouraged people from other parts of the globe to inquire about the different franchise opportunities in the US market. That has lead to many domestic franchise companies to become International franchise operations. Such internationalization gives a boost to their franchise business for sale offers in the national market.

Start looking into joining this rapidly expanding franchise industry today.