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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!

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Best Practices in Protecting and Enforcing Trademarks, Copyrights and other IP

Trademarks, copyrighted works, trade secrets and proprietary business information form the core of any franchise system, and are frequently a company’s most valuable assets. Trademarks, including service marks, logos, slogans and trade dress, define the brand identity as presented to the public. The “behind the scenes” business know-how on which the system is built and implemented by franchisees is embodied in a variety of copyrighted and proprietary works – operations manuals, proprietary processes, recipes and formulas, custom software, advertising copy to name a few.

The Ideal Franchisee - The Franchisee Point of View

Possessing an entrepreneurial mindset is a plus but one should also have the employee mindset as well. This lies in the fact that even though the franchisee must have the steely determination and drive to launch a business, they must be willing to be restrained and follow the directions of the franchisor. The level of control for a franchisee is noticeably less than of that of being an owner of your own independent business. However the level of risk presented to a franchisee is less than that of an independent business owner. Therefore this type of business is preferable for those looking for less risk. If we were to prepare a checklist of the traits, which were to be present within the ideal franchisee, it would appear something as:

What is Subfranchising?

Like the franchisor, the subfranchisor signs a subfranchising agreement with the franchisees (when a franchise is sold) in the area. Technically, the subfranchisor takes over the role of the franchisor in certain geographic regions.