Franchising: Moving Forward

There is an old saying about franchising – “In franchising you’re in business for yourself, but never by yourself.” This is certainly true whether you are selling batteries or cutting grass. Franchising lets people own their own businesses, but also gives them the backing of larger organizations when it comes to such factors as marketing and getting the best deals from suppliers.

There are plenty of other advantages to be being a franchisee. Perhaps the most important is learning how to start a business from the ground up. Other rewards include the use of established, recognized brands; training; ongoing support; and assistance with business systems.

Don’t feel uniformed if you think of only fast-food chains when somebody mentions a franchise. Quick-service restaurants count for a lot of franchises. But there are franchises for everything from house painters to battery stores. Just about every occupation has a franchise tied to it somewhere.

The franchise industry has a multitude of opportunities because of the sheer number and variety of businesses available in this marketplace. Individuals that possess an entrepreneurial ‘green thumb’ may be allured to the franchise industry because of its propensity for success. Those interested in owning a franchise can choose anything from hotels or hardwood stores to repair shops or hair salons…and everything in-between. Some of the more popular franchises are fast food, fitness, auto repair, and professional services. According to the International Franchise Association (IFA), there are an estimated 400,000 franchise locations in the U.S. spanning across 75 industries and employing almost 10 million workers.

Overall, many franchises saw good business conditions in 2016 and are predicted to continue in the same fashion. Consumer optimism has surged in response to the recent U.S. presidential election. As consumer spending increases, the franchise sector should also improve. According to IHS Markit, which helps many industries and governments make business decisions, there will be a recovery to the U.S. economy with the rise in the value of the U.S. dollar.

These predictions are not lost on the franchise industry, which is expected to grow at a pace near 1.6 percent. Industry employment is projected to grow 3.3 percent in 2017. In 2016, the franchise industry grew faster than expected, both in employment and output.

**No time like the present**

While the economy is improving, it is still not back to the pre-recession glory days when it seemed that every business was printing its own money. But this is still a great time to join a franchise. In fact, small businesses – including franchises – actually increase in number during periods of weak economic activity. When people lose their jobs with large companies and cannot quickly find similar jobs with other employers, they often decide to go into business for themselves.

Even better, it is no longer considered a step backward to go from a big corporation to a small business. In fact, some corporations view small business experience as a plus because small business owners must focus on cash flow, cost containment, customer retention, and overall survival – all of which are also important to the corporations.

In recent recessions, the number of small businesses grew. For example, during the 2001-2003 recession, the number of personal businesses increased from 16.9 million to 18.6 million. The most recent recession followed the same trends. Why? The costs of starting and maintaining a small business – especially a franchise – are significantly lower than in past recessions.

Specifically, the costs associated with computers, Internet access, commercial real estate, and office equipment have dropped.

On the flip side, starting any business comes with a certain level of risk, as well as the possibility that the business will not reach the goals its owners set. Statistics indicate that many small businesses will fail. However, becoming a franchisee increases the odds of success. According to the International Franchise Association (IFA), only 10 to 12 percent of all retail and service enterprises are franchises, yet the franchises account for more than 50 percent of the revenues of those enterprises. This means that, even though franchises are actually outnumbered in the retail and service sectors, they bring in most of the money. These percentages, coupled with the advantages of having a franchise’s backing, make becoming a franchisee a less risky proposition than going it completely alone.

**Opportunity for Veterans**

The International Franchise Association also plays a big role in veteran hiring and veteran ownership. In 2011, the IFA launched Operation Enduring Opportunity to bring more veterans, wounded warriors, and military spouses into franchising.

Operation Enduring Opportunity is built on the IFA’s VetFran strategic initiative (, which has worked since 1991 to make franchise ownership more accessible through member companies by offering financial incentives, training, and mentoring.

With the economy looking better and opportunities around every corner, this might be the best time in a long time to become a franchisee. The opportunities are robust, the economics are right, and the resources are available. In short, things are looking great for anyone thinking about buying a franchise in 2017.