Outlook 2013: Franchises forecast to grow faster than other businesses

Franchise businesses will continue to grow at a slightly faster rate than other businesses in terms of job creation, new business formation, economic output and GDP contribution, according to IFA’s first quarter update to the Economic Outlook for Franchise Businesses report, prepared by IHS Global Insight for the IFA’s Educational Foundation.

“The report is good news and shows franchising remains an incredibly strong and resilient business model that generates jobs and economic growth for the American economy,” said IFA President & CEO Steve Caldeira.

The forecast is essentially unchanged from the IFA’s initial 2013 forecast, which was released in December 2012. It predicts:

  • The number of franchise establishments in the United States will increase by 1.3 percent in 2013, just short of the 1.4 percent initially forecast, from 747,359 to 757,438.  
  • Revenue from franchise establishments in nominal dollars in 2013 will increase 4.2 percent, from $769 billion to $802 billion, after a 4.9 percent increase in 2012.
  • The gross domestic product of the franchise sector is projected to increase 4.0 percent in 2013,  from $454 billion to $472 billion. This is approximately 3.4 percent of U.S. GDP in nominal dollars, following a 4.6 percent increase in 2012.
  • The number of jobs in franchise establishments will increase 1.9 percent, from 8.101 million to 8.257 million. Last year saw a gain of 2.1 percent.

The International Franchise Association is the world’s oldest and largest organization representing franchising worldwide.  IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy.


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