Established chains are booming, and last year alone 500 new franchises were formed.
CNNMoney:
Established franchises are growing like weeds, while new franchises are popping up in record numbers. Leading the pack, the number of fast-food franchise businesses jumped 67% from 2003 to 2005, the International Franchise Association (IFA) and franchising research firm FRANdata said in a joint report.
Service businesses, real estate and building and construction franchises were among the fastest growing. Only the travel industry suffered a decline. Entrepreneurs are also creating new franchises with increasing frequency, the study found. Over the past 3 years, around 900 businesses started franchising. In 2005, there were over 500 new franchise businesses, that is up from 220 in 2004 and 207 in 2003.
A 3rd of all franchises had more than 100 operating outlets and nearly half had more than 50. Significantly influenced by the growing number of new franchises in the past few years, 25% had 10 or less units. ‘More industries are choosing franchising as a method of expanding their business,’ IFA President Matthew Shay said in a statement. Also fueling the growth in franchising is that baby boomers are starting new businesses in record numbers, according to a spokeswoman for the IFA. (More retirees opting to launch startups).
There are 767,483 franchise businesses in the U.S., according to a study by PricewaterhouseCoopers based on data from 2001, the latest figures available. The franchising sector’s impact on the economy exceeds $1.5 trillion and provides more than 18 million jobs. The IFA is an industry group with more than 1,000 franchise-parent companies as members.
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