The International Franchise Association's latest Franchise Business Index shows that the industry is at its strongest level since November 2007, prior to the recession. The index measures the health of the franchising industry based on employment and sales numbers. It is up 0.3 percent in July to 110.2.

The July increase in the FBI was driven by gains in both employment and sales of franchise-intensive industries, and improvements in small business confidence.

"Franchise businesses continue to create jobs and demonstrate that the franchise business model remains the best and most proven vehicle to quickly grow and scale a small business," said Steve Caldeira, IFA president and CEO. "While the record high FBI underscores the inherent strength of the franchise industry, concerns remain, particularly the rate of growth in new jobs."

According to the ADP National Franchise Report, the franchising industry added 12,300 new jobs in July, following a strong June. Despite the post-Recession peak, challenges remain.

"While we've seen continued job creation, despite the ongoing economic and public policy headwinds, our industry would be growing much faster if lawmakers in Washington could put aside their partisan differences to enact comprehensive tax reform and provide much-needed relief within the Affordable Care Act to mitigate the most costly, burdensome and onerous mandates that are clearly throwing a wet blanket on further job growth," Caldeira said.

The FBI was developed by IHS Global Insight on behalf of the IFA Educational Foundation.

Read more about franchising and growth.

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