And the Survey Says, Future is Bright for Franchising

By John Reynolds

Current economic conditions are good for franchised businesses and the outlook for the year ahead is very optimistic, International Franchise Association franchisor-members confirmed in a recent Web-based survey. More than two-thirds (68 percent) held a favorable view for their specific business, half calling current conditions "very good" while a similar share said things were "somewhat good." For franchising overall, 70 percent were positive about the current health of the sector: nearly 27 percent gave the nod to "very good," while 43 percent were slightly less enthusiastic, noting "somewhat good."

Future Business Conditions

Those surveyed were also upbeat about future business conditions. More than three-fourths (77 percent) said they were optimistic about what lies ahead for their specific business: nearly 46 percent marking "very good," nearly 32 percent saying "somewhat good." Viewing the overall outlook for franchising, 72 percent of these franchise system leaders gave a thumbs-up to future business conditions: the "very good" group at nearly 31 percent; "somewhat good" share at 41 percent.

Asked to share their outlook for the year ahead in sales and unit growth, nearly three-fourths (74) percent) said they believe their system-wide gross sales will increase: nearly half (48 percent) expect increases of 11 percent or more while more than one-fourth foresee 6 percent to 10 percent improvements.

Sales of franchised units will also be boosted, 76 percent believe. Nearly half (46 percent) expect 11 percent or more growth while almost 30 percent predict 6 percent to 10 percent increases.

Franchisors also expect to create jobs in the coming year: 72 percent report they plan to increase employment within the next 12 months.

The survey was conducted via e-mail to members of the association in December and January. Highlights of the "Business Outlook and Compensation Survey" were presented during the IFA annual convention Feb. 25-28 in Palm Springs.

A Benchmarking Task Force, chaired by Meineke Car Care Centers CEO Kenneth Walker, is exploring ways to develop metrics that franchisors can use to compare performance with their peers and boost overall productivity.

For franchise systems seeking management talent, the IFA Career Center offers both position postings and resumes for review. Visit Franchise.org and click on "Career Center."

John Reynolds is president of the IFA Educational Foundation. He can be reached at jreynolds@franchise.org.

Reprinted with permission of the International Franchise Association's Franchising World Magazine. To view the International Franchise Association website, go to http://www.franchise.org/