The International Franchise Association (IFA) is forecasting impressive growth for the franchise industry in 2018. Data indicates that the franchise sector grew faster than the overall economy in 2017 and will do so again in 2018 as it has in recent years. Additionally, the number of black-owned franchises rose briskly to 8% in 2012 from 4.4% in 2007.
Other takeaways from the IFA:
- The number of franchise establishments increased 1.6% in 2017 and expect them to increase another 1.9% in 2018 to 759,000.
- Franchise employment is forecast to grow 3.7% in 2018 after growing 3.1% in 2017, and franchise employment will continue to outpace economy-wide employment growth.
Impressive, right? While startup and so-called ‘sharing economy’ businesses (think Airbnb and Lyft) have also been hot over the past several years, franchises have continued to serve as a critical growth engine for the economy.
For areas of the country where taxes and housing costs trend lower, franchising has been even more impactful as it directly contributes to building new communities and growing existing ones.
Although food is the most commonly associated category with franchising, the best performing category continues to be Personal Services and is projected to rank first in growth in the number of establishments and in employment in 2018. The Quick Service food category saw some slowing in growth in 2017 but is expected to pick back up in 2018.
In addition, as of Jan. 1, 2018, the Small Business Association (SBA) has revamped their lending program. And as per BizBuySell President Bob House, in a recent article, there are many reasons for small business owners to be optimistic these days, including more streamlined loan processing and flexible equity standards.
With the 2017 results and the 2018 projections, it appears that now is an opportune time to enter into the franchising world. Unemployment is at an all-time low, salaries are increasing, and corporations are paying bonuses, which means those golden handcuffs are as tight as ever!