Franchises Are Expected to Outpace Other Industries in 2013

Jessica SarterBoeFly In The News

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via Entrepreneur (By: Cheryl Munk)

The coming year isn’t likely to be a home run for franchise growth, but it won’t be a no-hitter either.

The number of franchise establishments in the U.S. is expected to rise by a modest 1.4 percent to 757,055 in 2013, according to a report released yesterday by the International Franchise Association (IFA). The industry grew by 1.5 percent in 2012.

Uncertainty about the economy and fiscal issues are expected to weigh on the franchise sector in 2013, but it is still expected to outpace other industries in terms of growth, according to the report.

The franchise industry is expected to add 162,000 jobs in 2013. That’s a 2 percent increase from 2012 bringing the total to an anticipated 8.26 million jobs. According to their findings, the IFA said industry growth estimates would be greater if there were more clarity about the future of the economy, taxes and how the new health care legislation will be implemented.

Members of the franchise industry are also concerned about continued softness in lending. While there have been some signs that the credit crunch is easing, conditions are still weak. According to the IFA Business Leader survey, 52.9 percent of franchisees said the lack of small business lending continues to have a negative impact on their business, compared with 55.5 percent a year ago.

Stronger credit markets will be a big boon for the franchise industry, according to Mike Rozman, co-president of BoeFly, an online marketplace that matches small business borrowers with lenders.

“As credit access continues to improve, we’ll have more franchise growth as a whole,” he says.

Read the full article at Entreprenuer.com