Franchise
Franchise Businesses to See Slow Growth in 2010
T
he 2010 economic outlook for the na- The Franchise Business Economic gain of nearly 18,000 establishments.
tion’s franchise businesses forecasts a Outlook for 2010, prepared by Pricewa- Jobs in franchise businesses are expected
slow recovery with marginal increases terhouseCoopers LLP (PwC) for the In- to grow 0.4 percent for a gain of 36,000
in the number of jobs, economic output ternational Franchise Association’s Edu- jobs after losing over 400,000 jobs in
and the number of establishments, but the cational Foundation, forecasts that the 2009. Overall economic output, the gross
continuing credit crunch will limit the number of business-format franchise es- value of goods and services produced by
amount of growth that franchise business- tablishments will increase in 2010 by 2.0 franchise businesses, is forecast to in-
es have seen relative to prior recoveries. percent, from 883,292 to 901,093—a net crease 2.8 percent to $868.3 billion—an
increase of $23.6 billion in 2010.
“The U.S. economy is expected to ex-
perience slow growth in 2010 as the na-
tion begins to recover from the recession.
The Franchise Business Economic Out-
look for 2010’s macro view of the econo-
my anticipates nominal gross domestic
product (GDP) to grow 3.8 percent, while
economy wide employment is projected to
increase 0.4 percent in 2010,” said Drew
Lyon, principal in PwC’s National Eco-
nomics & Statistics practice. “Our fore-
cast is for output of all franchise business
sectors to expand modestly in 2010 as the
recovery takes hold.”
The report estimates that in 2009 fran-
chise businesses reduced employment by
4.1 percent, resulting in a loss of 409,000
jobs as declining consumer spending
caused owners to reduce costs. The num-
ber of franchise establishments in 2009
was estimated to have stayed relatively
flat, declining 0.1 percent. Output of fran-
chise businesses was estimated to decline
by 0.7 percent in 2009, for a loss of $5.7
billion.
“We are pleased that the 2010 outlook
for franchise businesses is projected to be
more positive than 2009, but access to
credit remains a major hurdle to increase
jobs and economic output at the levels we
have seen during past recoveries,” said
Drink tap water. And before you know it, you can
IFA President & CEO Matthew Shay. “An
stash away $14,000.
expected $3.4 billion shortfall in lending
to franchise businesses in 2010 will result
You don’t always have to drink bottled water. A $3 bottle a
in 134,000 jobs not created and $13.9 bil-
day x 365 days x 10 years x 6% interest is $14,694. That could
lion in economic output lost. We urge
Congress to quickly pass bills currently
be money in your pocket. Small changes today. Big bucks
on the table that would close this lending
tomorrow. Go to
feedthepig.org for free savings tips. shortfall and allow franchise businesses to
operate at their full economic potential.”
Source: International Franchise Association
58
www.blackeoejournal.com The Black E.O.E. Journal
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