For any type of business, regardless of industry, COVID-19 brought significant change to how owners operate their respective enterprises. Franchisors and franchisees also felt the pain that came with a pandemic. A great many operations were forced to shut down. Many were able to reopen. Far too many were permanently shuttered.
The International Franchise Association (IFA) annual Economic Outlook Report provides insight into both the past and the future of franchising operations. Confidence is strong due to the ongoing vaccine distribution combined with schools reopening. Legislative action in individual states could make a significant difference.
Specific findings from FRANdata includes:
- Employment shrunk by 11.2% to 7.5 million in 2020, resulting in the loss of close to one million jobs due to reduced staffing levels caused not only by significant revenue declines but also coronavirus-driven limited capacity mandates.
- Gross Domestic Product (GDP) was at three percent, with franchises contributing $670 billion to the US economy.
- Government assistance could eliminate the damage done by the pandemic in 2020 with the opening of more than 26,000 locations that will staff 800,000 new employees this year.
- These new locations will contribute nearly half a billion dollars to the GDP by the end of 2021.
- Overall franchise economic contributions are forecasted to grow 7 seven percent in 2021.
For businesses looking to grow their operations and entrepreneurs looking to purchase franchises, the economic outlook is promising. As with any complex transaction involving significant amounts of money, the help of an attorney experienced in this area of the law can help build a strong foundation for the future.