Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!
Identify the perfect franchise for you! Take our short quiz Take our free franchise quiz!

New Government Data Will Measure the Economic Impact of Franchising

According to the International Franchise Association (IFA), newly released data in the 2007 Economic Census Franchise Report will help quantify the economic impact of franchising. “Determining the economic impact of franchising is a key strategic priority for the IFA in our efforts to showcase the importance of franchising to the U.S. economy,” said Ken Walker, IFA chairman as well as chairman and CEO of Driven Brands.

According to Walker, the report is the result of the U.S. Census Bureau's inclusion of questions on franchising in the economic census for select industries. The report collected information from businesses with paid employees in nearly 300 industries. Data shows national-level estimates by industry sector of franchise establishments, employment in franchised businesses, and payroll and sales from franchised businesses. Through these reports, the IFA hopes to gain a better understanding of the role of franchising in the free enterprise system, as well as its contributions to the U.S. economy and the variety of paths franchising provides for entrepreneurs to become business owners.

“Franchising plays a vital role in our nation’s economy and drives new job creation,” said Walker. “This new report represents the first comprehensive ‘census of franchising’ by the government and demonstrates that franchise businesses provide many options for entrepreneurs who may be considering starting a franchise business.”

The data will be included in the third volume of The Economic Impact of Franchised Businesses report, which is scheduled for release in February 2011. As in its previous incarnations, Volume 3 of the franchised business census report will also include estimates of the indirect economic impact of franchising due to the products and services that franchise systems purchase from other businesses. Volume 3 will include measures of both GDP (Gross Domestic Product) and economic output. Data in the report will be broken out by line of business, by state and by congressional district.

Readers may find a copy of the 2007 Economic Census Franchise Report at the U.S. Census Bureau website.

How do you think the Franchise Economic Impact report will help private investors considering a franchise purchase? Is macro data like this even relevant for potential franchisees or is it simply an academic exercise for consumption by economists and policymakers? Please leave a comment below!

Follow us on Twitter @FranchiseHelp

Know Before you Go – Non-Compete Provisions in Franchise Agreements

In general, non-compete provisions state that the franchisee will not, during the term of the franchise agreement and for a reasonable period thereafter (typically two or three years), own or be involved in any “competitive business.” What constitutes a “competitive business” will vary from franchise system to franchise system, but most franchisees can generally expect to be prohibited from taking part in any business that offers goods/services that are either identical to or competitive with the goods/services offered under the franchise system. Non-compete provisions must be limited in geographic scope, and generally cover a set radius (usually somewhere around 5 to 25 miles) around the former franchised outlet, and possibly also the outlets of other existing franchisees.

Best Franchises for Young Entrepreneurs

Politicians, academics, and corporate leaders alike love to proclaim that the "dreams of the youth" will drive our country's economic future. It's a fine sentiment, to be sure, but many of these same leaders, blind to the realities of the modern American (and global) economy, seem to incorrectly believe that these youthful dreams include following the increasingly unreliable path of earlier generations. Get a clue!

Top 5 References to Applebee's in Friday Night Lights

Fans of the recently finished series Friday Night Lights remember the show for its heartwarming depiction of a small Texas town, Dillon, in love with its high school football program. (For you non sports lovers, the series' name refers to the day and time football games are typically contested at the high school level).