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Franchises will see slow and steady growth in 2013

January 2, 2013

WASHINGTON — An IHS Global Insight report prepared for the International Franchise Association (IFA) Educational Foundation indicates that franchise businesses will grow at a slightly slower pace in 2013 than in 2012, yet the franchise industry will continue to outpace growth in other business sectors, according to a press release.

Compared to 2012, The Franchise Business Economic Outlook: 2013 forecasts very similar growth rates in new franchise business formation, job creation, output and contributions to U.S. gross domestic product (GDP), the release stated.

ifa report"While we are pleased the industry continues growing at faster rates than other sectors of the economy, we could be growing much faster, creating more new jobs and businesses, if Washington addressed the tax, spending and regulatory uncertainty plaguing the small business community in a meaningful way," said IFA President and Chief Executive Officer (CEO) Steve Caldeira.

"Franchise businesses emerged from the recession stronger due to the strength of the franchise business model and the strong support of franchisors working with franchisees to sustain profitability. Franchise businesses are now poised to accelerate growth plans, but industry leaders say the lack of confidence in our leaders in Washington to address the fundamental challenges facing our economy is keeping them and prospective investors on the sidelines," Caldeira added.

According to the release, the macroeconomic outlook for 2013 is another year of only modest improvement in employment and consumer spending, with overall economic growth held back by slower growth of business investment and a bigger decline in federal government spending.

The basic indicators of the health of the franchise sector will show a slight slowdown, yet the franchise sector will continue to do well within the industries where franchise businesses are concentrated, the release noted.

Click here to read the release in its entirety.