In our previous post, we discussed how one controversial study recently found that minimum wage increases, which are gaining in political popularity, can adversely affect franchised business owners.
While you might think that a finding like this would somehow portend an altogether ominous forecast for the state of franchise businesses in 2016, a recently released report by the International Franchise Association suggests otherwise.
After examining data provided by the analytics firm IHS, the IFA made the following bold predictions for the U.S. franchise space in 2016:
- Total economic productivity will be close to $944 billion, a 5.8 percent increase from 2015
- Franchise employment will jump by over 3 percent from 2015
- Total number of franchises will increase by 1.7 percent, the same rate as 2015
Areas that the IFA identifies as poised for considerable growth include business service franchises, lodging franchises and food service franchises. Indeed, the report predicts both full-service and fast food establishments will see a 6.3 percent jump in total economic productivity in 2016.
What’s behind these rather encouraging figures?
The IFA report credits the entrance of more non-traditional businesses into the franchise space as helping fuel the optimism for 2016. Specifically, it highlights how these business owners are starting to see how the franchise model can help them expand operations through the hard work of invested entrepreneurs.
The report wasn’t all positive news, however, as the IFA indicated that those who aren’t established operators may find it harder to secure a small business loan, while existing franchisees will have to navigate the introduction of both new overtime laws and labor regulations, and the increased costs precipitated by the Affordable Care Act.
This report is still highly encouraging. Here’s hoping 2016 proves to be a banner year for franchisees here in Georgia and across the nation.
Entrepreneurs looking to open a franchise or expand their holdings should seriously consider meeting with a skilled legal professional who can guide them through the process, and protect their interests should any legal problems arise.