Why Franchises Have Succeeded in the Downturned and Recovering Economy

Not every business has declined in the last few years.  Franchise numbers have been steady and many have even been prospering.  A recent article published by Scott Shane on Smallbiztrends.com explains these franchise business trends and why franchises more than any other business are prospering.  GbBIS takes a look at Shane’s insight into franchises in the downturned and recovering economy. 

On Smallbiztrends.com, Scott Shane gives some insight into the financial performance of American franchises over the last few years:

“According to data provided in the Franchise Business Economic Outlook: March 2012, prepared by IHS Global Insight for the International Franchise Association Educational Foundation, the number of franchised establishments declined 3.1 percent; the number of employees at franchised outlets fell 2.4 percent; and the inflation-adjusted dollar value of output dropped 2.2 percent between 2007 and 2009.”

While franchises declined during these years, Shane explains: “these numbers are relatively modest in comparison to what happened to the economy as a whole.”

“Franchised businesses have rebounded relatively strongly since 2009. While the number of franchised establishments declined an additional 1.5 percent from 2009 to 2011, employment at franchised outlets grew by 1.7 percent. Moreover, the inflation-adjusted value of output increased 3.6 percent over the two-year period.”

Shaneexplains why franchises have seen increased in employment and value.  The answer he gives: efficiency.

“Efficiency is higher now than before the recession. By shrinking the number of outlets, and increasing employment at the locations that remained, owners have improved both output per outlet and output per worker. Output per establishment increased 6.1 percent in real terms from 2007 to 2011 – up from an average of $969,000 to $1,028,000 in 2012 dollars. Output per worker rose 2.1 percent in inflation-adjusted dollars, increasing from $93,400 to $95,400.”

Franchises seem to be prospering amidst economically uncertain times.  But if your franchise needs help achieving success, consult GbBIS.  GbBIS has been helping franchises for over 25 years.  Creating custom maps , statistical business reports, and browser-based web applications, GbBIS provides franchises with the tools they need to better manage their business, territories, and sales data.  Visit GbBIS.com to see our Franchise Territory maps and Franchise Territory Management web applications.

Contact GbBIS today and discover how we can help you better manage your franchise. 

Visit Us on the Web at gbbis.com


Call Us at 1-877-447-6277


Image 1 via gbbis.com, Image 2 via visualphotos.com, Image 3 via prefranchise.com, Image 4 via gbbis.com


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