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FranNet 2012 Trend Predictions: Franchise Industry Will Continue to Grow

Dec 21, 2011

Job market failure to rebound in 2012 will push corporate workers into franchising

Jania Bailey, COO of FranNet, talks about her franchise industry predictions for 2012

The nation’s job market will continue to struggle in 2012, opening more opportunities for former corporate executives and managers to reinvent their careers through self-employment in franchising, say the franchise experts at FranNet.

FranNet,  a national franchise consulting firm, has worked in the last three years with a growing number of potential entrepreneurs who either lost their corporate jobs or chose to leave them. Many of these workers have turned to the growing franchising industry as an alternative that gives them more flexibility and control over their jobs and lives and a more secure financial future.

“Since 2008, the franchise industry has been one of the few segments of the national economy that’s shown consistent growth,” said Jania Bailey,  FranNet’s COO. “In 2012, many corporate workers who have been out of work for months will realize they are not going to replace that six-figure income and will research franchise ownership as their next career move.”

Each new U.S. franchise creates an average of 10 new jobs, according to FRANdata, which tracks franchise industry statistics. In 2011, American entrepreneurs opened more than 19,000 new franchise businesses; it was a record year for FranNet, which Inc. magazine listed as one of the fastest-growing U.S. companies.

FranNet’s 2012 trends for the franchise industry:

• More outplaced corporate executives will turn to franchising as career options dwindle. Experienced workers will leverage their experience to manage and grow viable franchise opportunities, creating wealth and jobs.
• Low-investment,  service-based franchise brands will continue to grow. Franchises that require initial investments of $150,000 or less will have the greatest chance of growing because of their potential for high returns despite the low initial cost.
• Senior health care and other franchises that offer goods and services to the elderly will grow as more baby boomers hit retirement age.
• Family-run franchises, which already make up 25 percent of the new business FranNet helps establish, will remain popular as people invest in franchise opportunities to employ out-of-work spouses and adult children with poor career prospects.
• Franchises that help people extend the life of goods and do more with less will continue to thrive. Car repair, home improvement and refurbishing brands do well in an age when people would rather repair items than replace them with new ones.
• As has been the case since the financial collapse of 2008, financial institutions will continue to be tight-fisted with loans, leading to frustration for potential entrepreneurs who lack money for their initial investments. Most new franchisees will have to rely on 401K rollovers and Small Business Administration loans from small community banks.

Thousands of former corporate employees who have discovered franchising have learned what entrepreneurs have always known: Franchise ownership can not only replace lost income but create jobs, help invigorate the local economy and establish a reliable source of retirement income with substantial resale value.

“The coming year will be a great one for the franchise industry,” Bailey said. “As a country, we’re becoming more realistic and practical about where the job market is going. Workers who have been sitting on the fence are likely to jump into franchising this year, and the franchise industry is going to be the big winner.”

About FranNet
For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals,  skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

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