Franchise Industry to Grow in 2012 !

Right after bleak years, franchises can be forward to moderate rise in 2012, based on a report released Monday. And that’s great news for the beleaguered economy, given the franchise industry’s contribution to hiring and gross domestic product.

Franchise businesses are predicted to add 168,000 jobs the coming year, delivering the overall number of jobs in the franchise industry to 8.1 million, based on the report released by the International Franchise Association, the industry’s major trade group.

The total number of franchise businesses will grow by 1.9%, or 13,928 establishments, to a total of 749,499 in 2012, the IFA predicts. The product sales of franchise businesses will probably increase by 5%, or $37 billion, the IFA expects, for a total financial output of $782 billion.

The progress is predicted to be tougher in some areas of the franchise industry than others. If you’re planning on beginning your own franchise in 2012, the 3 areas likely to see the greatest rise in sales are, in order, personal services (think salons, health-care centers, senior-care facilities, or massage businesses), retail products and services, and real estate franchises.

While the franchise industry’s outlook has increased, the sector has not yet returned to 2007 levels. “The rate of growth is far below the growth trends we experienced before the recession,” said IFA President & CEO Stephen J. Caldeira in a written statement.

Caldeira added that lower taxes for corporations and individuals as well as increased lending to small businesses would increase the industry’s rate of growth.

And even as the franchise industry begins to turn around, leaders in the sector — both franchisees and franchisors — are concerned with the slow pace of economic growth. In particular, more than 80% of franchisors said that tight credit impacts their ability to grow and more than 55% of franchisees say reduced access to credit has negatively impacted them, according to the IFA’s Annual Business Leader Survey.
Furthermore, respondents to the survey made it clear they were fed up with the stalemate in Washington. In particular, respondents to the leader survey said they felt a “lack of support for pro-growth small business policies,” and a frustration with the “negative rhetoric coming out of Washington.”