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Franchise Outlook 2010: The Reaction

Way back in 1985, John Naisbitt, the author of Megatrends, wrote the text “The Future of Franchising: Looking 25 Years Ahead to the Year 2010 for the IFA. Naisbitt stated that franchising was certain to grow, and, as the IFA have acknowledged, he was right. But where does franchising go from here? That was the subject of yesterday’s 2010 Economic Outlook.

There’s loads of material in the PriceWaterhouseCoopers Outlook and we’ll hope to touch on some of the key findings here. The forecast for the next year calls for “slow growth”. I don’t think this will shock anyone who’s been following the industry closely. The recession may be behind us, but the lending market is still harsh, and political issues, such as the environment and coming health care legislation, don’t make things easier.

The feeling is that the franchising sector will mirror the small gains the domestic economy as a whole is slated to make.

The sectors that are predicted to experience the highest growth are Personal Services, Quick Service Restaurants and Business Services. Job losses are predicted in the lodging sector, while real estate industry should see some new jobs added.

There’s also a poll of franchise owners on the state of the industry. A small majority expects the economy to improve in 2010 and there has been a 15% hike in the number of business owners that feel that the economy’s performance will be “somewhat good” in the next 12 months.

As far as strategies for the future go, the IFA have a four part plan that reads like this:

  • To shape the legislative, regulatory and public policy decisions that impact franchising.
  • To enhance and promote the unique image, attributes, and benefits of franchising and of the association among key audiences.
  • To provide programs and services that provides value to members
  • To increase membership across all franchise sectors.

These are all pretty interesting and hopefully, if delivered can ensure the future growth of franchising. As you’d expect, there’s plenty of reaction in the media. CNBC did an interesting interview with Matthew Shay about the Outlook, and also spoke to a UPS Store franchisee. Meanwhile, over on the Uptake Travel Industry blog, Julie Sturgeon bemoans the problems with lodging sector, while providing an overview on the report. Thankfully, the IFA have provided a fact sheet for anyone looking for specific figures on the report.

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