Franchising industry experiences growth for third consecutive month

April 17, 2013

The Franchise Business Index (FBI), an index of the economic health of the franchising industry, increased by 0.3 percent in March, boosted by modest improvements in labor market indicators and credit availability.

The International Franchise Association announced the index rose to 109.3, marking the third consecutive monthly increase of 0.3 percent. Compared with March 2012, the index was up 1.9 percent.

"Demand for franchise growth remains strong and with lending to franchise businesses reaching its highest level since the recession, the industry remains a driver of growth and job creation despite the uncertain economic and public policy environment," said Steve Caldeira, IFA president and CEO. "While we are pleased the index grew for the third consecutive month, the overall rate of growth is still problematic and could be much higher if the franchise and small business community was not facing continued threats of higher taxes, costs associated with the Affordable Care Act, fluctuating commodity and energy prices and the prospect of a minimum wage hike that would chip away further at the bottom line and make it more difficult to grow a business."

Although the index was up, small business optimism was down in March. However, credit availability showed improvement. Also, the index component measuring employment in franchise intensive industries was up slightly, and a fall in the unemployment rate and an increase in the index of self-employment in the economy showed larger gains.

The Franchise Business Index was developed by IHS Global Insight on behalf of the IFA Educational Foundation.

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Topics: Franchising & Growth , Trends / Statistics

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