The existing franchise restaurant for sale market continues to grow as the business model shows strength in unit growth, output and employment. As Restaurant Brokers, we focus on this sector due to the strong buyer interest and turnover in existing franchise restaurants for sale.
The newest data from IFA (International Franchise Association) Economic Outlook Survey confirms the overall health of the franchise market. What’s fueling the results? The overall feedback is that current tax reform and regulatory relief coming out of the White House is driving stronger franchise growth. That has spiked optimism and confidence among franchise businesses. IHS Economics prepared the findings and the project many of the franchise sector’s 2018 economic contributions. They anticipate growth in units and employment, increases to the GDP which include the following:
- Franchise establishments are expected to grow an additional 1.9 percent in 2018 to 759,000.
- Franchise employment is projected to grow 3.7 percent, continuing to outpace the rest of the economy.
- The gross domestic product (GDP) of the franchise sector is forecast to exceed U.S. GPD growth and increase by 6.1 percent to $451 billion. The franchise sector will contribute approximately 3 percent of U.S. GDP in nominal dollars.
- Franchise business output is expected to increase by 6.2 percent to $757 billion.
- Franchise Personal Services experienced strong growth over the past year and is expected to rank first in growth of the number of establishments and in employment in 2018.
Do these numbers ring true to the restaurant brokers? You bet! We just returned from the International Franchise Association convention in Phoenix. Here are some of the key takeaways from this meeting.
Don Fox, CEO of Firehouse Subs told an audience at the Leadership Development Conference that, “Growth is not an option.” We agree. This sage advice for all unit and franchisor operators lets you know that if a brand ceases to grow, it will soon cease to exist.
From the main stage and in breakout sessions, there was renewed excitement about business conditions. The relaxation of the regulation feeding from D.C. and the pro-business government, coupled with tax cuts had more than one operator excited about the future.
The relationship between a franchisee and franchisor is a symbiotic one. Neither can grow without the other and both reflect benefit from working together. It appears to us that many brands are working to realign themselves with their franchisees to make sure this relationship is protected, especially in the face of some ugly franchise disputes that were made public this year like the one with Subway franchisees.
Lastly, we once again saw brands focusing on the use of technology for not only operations and management, but expanding into other portions of the business to provide a superior customer experience.
As we continue our focus on existing franchise restaurants for sale, we’ll keep you posted on this sector, it’s challenges and the overall opportunity.
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