Pretty darn strong! According to the 2018 Franchise Business Outlook Report issued by the International Franchise Association (IFA), the franchise sector is expected to grow faster than the rest of the U.S. economy. In 2018, franchise establishments are expected to grow an additional 1.9 percent to reach 759,000 strong.
Why is the franchise market growing?
Deregulation. According to an article by the IFA, Association President and CEO Robert Cresanti believes that lawmakers are determined to remove barriers to economic growth that existed previously. If, he adds, lawmakers continue to support a strong business environment, then franchises are likely to thrive and continue to provide jobs, thereby helping to strengthen communities. Win. Win. Win!
What does a growing franchise market mean for you?
If you are a franchisor…you may be in for a good year. If, as reported, franchise establishments grow by 1.9 percent to 759,000 this year, you may find your group is receiving more inquiries and even multiple inquiries for the same territories. Great news, of course! But pay attention to all leads. Be mindful of which franchisee among applicants you invite to join your brand. Make sure you implement a strong application and vetting process to ensure you accept only the strongest candidates.
If you are a potential franchise buyer…this also may be a good year to invest. Growth in the franchise sector may indicate growing brand recognition for the franchise system you are considering. It’s a given that you are buying a franchise because you want to buy into a turnkey operation and a known brand. More franchises opening or operating in more locations, or more franchisors opening more territories means greater brand recognition. Key, of course, is buying into a franchise and franchise system that fits you. Good news, there are many resources available, free and low cost, to help you identify the franchise fit.
So, according to the IFA’s 2018 Franchise Business Outlook Report, this could be THE year for franchisors and franchisees. So long as you pay attention to the details. It’s a given that successfully building a business, whether a franchise system or a single unit franchise, requires paying attention to the details. Got questions? Feel free to email them to me, Julie Lusthaus, at firstname.lastname@example.org and let’s talk.