Franchise Business Review Announces 2009 Franchise Economic Impact Study

by Franchise Business Review

Franchise Business Review announced this week the outcome of its 2009 Franchise Economic Impact Study for the third quarter. The results of the study were based on research of 113 franchise companies, representing 53,705 franchise business outlets. This is the first year that Franchise Business Review has conducted this study, researching the effects of the recession on the franchise sector and various Industries.

“With new unit franchise growth year-to-date just 90 units shy of 2008 totals, we are projecting 2009 unit growth to be up 29.2%,” says Franchise Business Review President Eric Stites. “While this is great news for franchising and economy overall, not all sectors are experiencing growth. Retail and the food sector for example are flat or up only slightly of 2008 performance.”

Franchise Business Review found that while most sectors were experiencing some growth, the Health & Beauty sector lead with 42.9% growth quarter over quarter. The Sports and Recreation sector was in a close second. In the findings regarding franchise sales growth by investment level, larger investment concepts ($200,000 - $299,000) showed a significant rebound in Q3.

“The fact that higher investment franchise concepts reported a significant increase in new unit sales in the third quarter is evidence that both credit is loosening up and entrepreneurs are moving forward with their franchise development plans, “ continued Stites. “That being the case, lower investment franchise business, those with an initial investment under $100,000 still represent the majority of new franchise units opened during the quarter.”

In reference to franchise unit performance, measured by gross sales at the franchise unit level, Franchise Business Review found that performance is down slightly year-over-year. However 32.6% of those franchise companies surveyed stated that their sales were up over last year.

“Overall, looking ahead to Q4 results and 2010 performance, things are definitely a little brighter,” says Stites. “The slow recovery that we are now in will be driven by the top 20% of franchise brands that are doing things right – these top performers will represent 80% of the new growth in 2010.”
 

New report, conducted by Franchise Business Review, shows evidence of 3rd quarter economic recovery in the franchise sector. Read more and follow link to view the actual report.