Franchise Forecast for 2013

Franchise Forecast Continues Strong for 2013

ENTREPRENEUR

Published: Thursday, 28 Mar 2013 | 10:24 AM ET

By: Catherine Clifford, Entrepreneur

subway

Thinking of buying a franchise this year? If so, you will have company. Nearly 11,000 new franchise units are expected to open doors in 2013 in the U.S., according the International Franchise Association.

The number of franchise businesses in the U.S. is expected to grow this year to 757,438 from 747,359, an increase of 1.3 percent, according to the IFA’s first quarter update to its economic outlook, released Wednesday. The IFA, a Washington D.C.-based advocacy organization, commissioned economic analysis company IHS Global Insight, to prepare the report. Franchise businesses are expected to employ 8.3 million people in the U.S. by the end of this year and generate $802 billion in revenue, the report says.

(Read more: Fight Over Minimum-Wage Hike Heats Up on Main Street)

Franchises in the business, commercial and residential service industry are expected to grow the most quickly both in the number of employees and the number of establishments, according to the report. Shipping-giant The UPS Store and graphic signs and exhibit franchise Fastsigns are examples of business-service franchises. Commercial and residential business services include moving company Two Men And A Truck, landscaping business Lawn Doctor and plumbing-service franchise Mr. Rooter.

As far as sales, real-estate franchises are expected to see faster growth than any other franchise sector this year, IFA reports. House-inspection company WIN Home Inspection and painting company Fresh Coat Painters fall into the real-estate sector. Many people don’t realize that real-estate agencies, including RE/MAX and Century 21, are franchise businesses, too, IFA spokesperson Matthew Haller says in an email.

(Read more: Internet Sales Tax Needs to Be Fair)

By dollar volume, the quick-service restaurant category, which includes Subway and Dunkin’ Donuts, shows the most sales, with more than $200 billion in revenue expected in 2013.

While the forecast for the franchise industry is strong for the remainder of 2013, it could be better, IFA President and CEO Steve Caldeira, says in a statement. Business owners are anxious about the possibility of higher taxes and costs associated with the implementation of the Affordable Care Act, Caldeira says

http://www.cnbc.com/id/100600442?__source=xfinity|mod&par=xfinity

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