Franchise Businesses Do Well Despite Poor Economy
During this period of economic downturn, people who lost their jobs or are uncertain about holding onto their jobs usually cannot find new employment. Alisa Harrison of the International Franchise Association said, “They tap home equity, severance packages and sometimes retirement plans to start a new business that they can own so they can have some control over their future”. They go into franchising. This year, there is a 2.5% growth in franchises compared to 2010, she added. The State reports that fast-food restaurants top the list of franchises followed by personal services.
Altogether, there are about 785,000 franchised businesses across the nation, according to Alisa Harrison, spokeswoman for the Washington, D.C.-based International Franchise Association. That’s about 2.5 percent more than in 2010, but still shy of the roughly 792,000 in 2008, when financial markets collapsed in the fall and funding for start-up businesses all but disappeared.
By far, quick-service restaurants account for the highest number of franchised establishments at about 153,000, with personal services trailing at about 131,000.provide 7.8 million direct jobs and pump about $740 billion into the economy.
The final numbers for 2011 could be tweaked downward when the 2012 forecast is released in mid-December, but Harrison expects the year will end with positive growth in the number of franchised operations, jobs and economic output.
“Franchised businesses tend to do quite well during a recession,” she said.
When people lose their jobs or are uncertain about holding onto their jobs, they look elsewhere, Harrison said.
They tap home equity, severance packages and sometimes retirement plans to start a new business that they can own so they can have some control over their future, she added.can cost anywhere from several thousand to hundreds of thousands of dollars to open.
“It’s a great option to have,” she said. “And people take advantage of it.”
Photo by Anu Leponiemi