Franchise Businesses are Expected to Grow Faster in 2015

By Adam Robinson,
January 28, 2015

At the beginning of each year, the International Franchise Association (IFA) releases The Franchise Business Economic Outlook, which presents a forecast of the franchise sector of the United States economy. On January 7, 2015, the newest report was released and it states that franchise businesses are expected to grow and create more jobs at a faster pace than the rest of the economy in 2015.

‘Franchising is an American success story. Independently-owned and operated local franchise businesses are growing faster, creating more jobs at a quicker pace and producing higher sales growth than other businesses. Franchising is a vital engine of economic expansion in the United States and 2015 looks to be another strong year for franchise businesses,’ said Steve Caldeira, IFA President & CEO.

Here are some key findings from the 2015 business outlook report:

  • The franchise industry will add 247,000 new direct jobs in 2015, which is a 2.9 percent increase to 8.8 million jobs over last year.
  • The number of franchise establishments will grow this year by 1.6 percent to 781,794.
  • Economic output from franchise businesses is projected to increase by 5.4 percent over last year to $889 billion.
  • The gross domestic product (GDP) of the franchise industry is estimated to rise by 5.1 percent this year. The franchise industry will contribute to about 3 percent of the United States GDP in 2015.

Although, the future for the franchise sector looks bright, Caldeira has some hesitation about the franchise outlook due to the recent National Labor Relations Board (NLRB) issue.

‘Last month, the National Labor Relations Board moved to upend decades of law and practice by issuing a complaint against McDonald’s saying that it should be considered a ‘joint employer’ with its franchisees. The entire business model of franchising is endangered by this ill-conceived complaint,’ he said. ‘Hundreds of thousands of franchisees must now operate not knowing whether they should believe what their contracts clearly state, that they are in charge of their own work place practices, including setting wages and hours, or that the corporations from which they license their trademarks are also responsible for those things. The ruling could put the brakes on what looks like a banner year of accelerated growth and job creation in the franchise sector.’

While there is some hesitation with the NLRB and the possible ruling outcome there is still expected growth for a variety of franchise industries in 2015.

  • Quick service restaurants will continue to be growth leaders, ranking first in employment growth and fourth in output growth.
  • The retail products business line will rank second in employment growth and fourth in establishment growth.
  • Personal services businesses are estimated to be the growth leader in number of establishments and rank third in employment growth.
  • The lodging business line is projected to have another strong year with a ranking of second in growth of establishments and being a co-leader in output growth.

With the projected growth for the franchise sector, franchisees and franchise owners need to be well prepared when it comes to their hiring practices. The Hireology platform is a systematic, scientific franchise hiring system that helps you hire the right person. To learn more about the Hireology hiring platform and how it can help franchisees and franchise owners in 2015, visit today.

About the Author

Adam co-founded Hireology with the mission to help growing companies make better hiring decisions through data and better technology. Adam is passionate about entrepreneurship, donating time to a number of organizations that support the entrepreneurial cause. Adam completed his undergraduate study at the University of Illinois at Urbana-Champaign, and received his MBA from DePaul University in Chicago, IL.

Subscribe to our weekly newsletter and learn how to build your best team.