Will the Franchise Industry Prosper in 2013?

The downslide of the economy has hit many industries hard in recent years, including the franchise industry.  According to IFA (International Franchise Association), the steady growth that the franchise industry saw in 2012 will continue in 2013, although at a slightly slower pace.  As experienced franchise law attorneys, we understand that the economy is still not what most would consider stable; while many people believe the U.S. is back on a strong track, others argue that we are still in a recession, and that it is far from over.  So what does 2013 hold for franchise owners?  Entrepreneur Magazine describers the outlook as “cautiously optimistic.”

According to an article at the IFA’s website, the franchise industry is still a bit shaky because of uncertainly over public policy decisions, however it is expected that 162,000 new jobs will be added in 2013.  There are specific industry sectors that are expected to experience better success than others this year, including fast-food restaurant franchises, real estate, and residential/commercial service franchises.  The franchises which may see slower growth this year according to Entrepreneur include food retail and automotive franchises.

Even though the franchise industry as a whole is not forecast to do as well this year as in 2012, a survey conducted last November by the IFA found that in general, most franchisors were optimistic about the possibility for expansion in 2013.  Only a small portion of franchisors (8.4%) expected to see a decline in units this year, while 81.3% indicated at the time of the survey they planned to increase units.  Two areas of concern for franchisees are taxes and credit access, as many reported that they would be forced to cut jobs due to requirements under the Affordable Care Act.

The news in the franchise industry is both bad and good, however it appears that growth in the industry is on a far better pace than that of other private sectors.

Individuals who are interested in franchising or who are considering getting into the business should first consult with a skilled Los Angeles franchise law attorney.  At the Law Offices of Spotora & Associates, our lawyers are capable and knowledgeable in every area of franchising including review of agreements and restrictions, lease and business plans, financing/development, business incorporation, joint ventures, licensing, and more.  We offer both creative and practical solutions, helping entrepreneurs meet challenges with successful results.

This entry was posted on Monday, February 25th, 2013 at 1:44 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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