Page 2, FRANCHISE BUSINESSES TO SEE SLOW GROWTH IN 2010

Different Effects on Franchise Business Sectors
All 10 franchise business lines examined in the report are forecast to see increases in the amount of
economic output with Personal Services (4.4 percent), Quick Service Restaurants (3.2 percent) and
Businesses Services (2.6 percent) forecast to see the largest percentage increase.
Employment is forecast to decline in Lodging (-2.4 percent) and Commercial and Residential Services
( -0.9 percent) and increase in the other eight sectors, with the largest percentage increases expected in
Real Estate (1.3 percent), Quick Service Restaurants (0.8 percent), Retail Food (0.7 percent) and
Personal Services (0.7 percent).
Lodging (-0.8 percent) is the only sector expected to experience a decline in the number of
establishments. The sectors predicted to experience the largest percentage increases in the number
establishments include Quick Service Restaurants (3.1 percent), Real Estate (3.0 percent), Retail Food
(2.4 percent) and Retail Products and Service (2.3 percent).
Franchise Business Leaders More Optimistic for 2010
The reports’ overall forecast aligns with the results of a new IFA Franchise Business Leader Survey.
Franchise business leaders are more optimistic about how the U.S economy will perform in the next 12
months than they were a year ago. More than half (51.3 percent) of survey respondents say that the
economy will be better in 2010, compared to only one quarter (24.6 percent) of respondents in the
November 2008 survey. These business leaders have a less optimistic outlook for unit growth than 12
months ago due to ongoing challenges in accessing credit for new franchise prospects and for existing
franchisee expansion. While more than 78 percent of those surveyed expect moderate to significant
increases in franchise units, this compares to nearly 86 percent of those surveyed a year ago.

The survey shows the issues of greatest concern currently and in the year ahead are financing and
access to capital. Nearly half of the survey respondents (49.2 percent) ranked “financing and access to
capital” as their greatest concern, followed by nearly one-quarter of survey respondents (23.8 percent)
who ranked “franchise sales/development” as their next greatest concern.

Survey respondents are somewhat optimistic about business conditions in the next 12 months than those
surveyed a year ago. More than 40 percent of respondents stated that they expect business conditions
will be “somewhat good” in the next 12 months, compared to only 25 percent of those surveyed in
November 2008. Less than 20 percent (18.8 percent) stated they expect business conditions to be
“somewhat poor,” compared to one-third (33.5 percent) in November 2008.

Half of the franchise business leaders surveyed indicated their employment levels will “stay about the
same” in the year ahead, while 45 percent stated they plan to increase employment moderately to
significantly, and only 5 percent stated they plan to decrease employment moderately.
* Volume 2 of the Economic Impact of Franchised Businesses report includes product distribution
franchises. The 2010 Economic Outlook for Franchise Businesses studies business format franchises
only.
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About The International Franchise Association

The International Franchise Association, the world’s oldest and largest organization representing
franchising, is the preeminent voice and acknowledged leader for the industry worldwide. Approaching a
half-century of service with a growing membership of more than 1,250 franchise systems, 10,000-plus
franchisees and more than 500 firms that supply goods and services to the industry, IFA protects,
enhances and promotes franchising by advancing the values of integrity, respect, trust, commitment to
excellence, honesty and diversity. For more information, visit the IFA Web site at www.franchise.org.
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