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WASHINGTON, D.C., Nov. 22, 2005 – International Franchise Association President Matthew Shay announced recently that plans are being finalized by the U.S. Bureau of the Census to include questions about franchising in the 2007 Census of Business.

The Economic Census, which is conducted every five years, provides a detailed portrait of the nation’s economy based on surveys of more than five million businesses.  The census is mandated by federal law and requires firms to respond or face penalties for failure to report.

Questions will be added to census forms that will allow businesses to answer the question whether the establishment was “operating under a trademark authorized by a franchisor” and if it is a “franchisee-owned establishment or franchisor-owned establishment.” 

The Census Bureau distributes almost 600 versions of the census form, each customized to a particular industry.   IFA has learned that the bureau plans to include franchise questions on the census forms for approximately 80 industry categories that have franchised businesses. 

“While the number of businesses that use franchising as a method of distributing their products and services has steadily increased since the 1950s, there has been very little broad-scale economic research about this phenomenon,” said Shay.  “The next Economic Census will take a major step toward measuring the degree and scope of franchise business activity in the U.S.”

“We are very pleased that IFA, which includes franchises in many different lines of business, was able to work with the Census Bureau to ensure that critically important data on franchising will be collected,” said Dick Rennick, CFE, IFA chairman and CEO of American Leak Detection.

The IFA Educational Foundation’s “Economic Impact of Franchised Businesses,” published in 2004, documented the contributions of more than 760,000 franchises in more than 75 different business categories from quick-service restaurants and real estate agencies to auto repair shops and hotels.   According to the study, which was based on 2001 data, franchised businesses accounted directly for nearly 10 million jobs and $625 billion in economic impact. 

Economic Census statistics are collected and published by “establishment,” meaning any business or industrial unit in a single physical location that produces or distributes goods or performs services.  A single store or factory is considered an establishment by the Census Bureau. The Economic Census provides a wealth of economic statistics about the nation’s economy including the number of establishments and firms, employment, labor costs, sales, receipts and value of shipments, expenses, and assets and capital expenditures. 

Census statistics are used by businesses, research firms, and government officials in many ways.  Businesses compare their sales to census totals for their industry or area.  Businesses use census data for benchmarking and performance measurements.  Companies use census data to plan for development of new markets, allocate advertising, and locate new stores or offices.  Monthly retail sales data are collected from samples based on census information and the estimates are adjusted to be consistent with census results.  Census results are a major source of information for the gross domestic product.  Local, state and federal agencies use census data to understand their economic base and focus on ways to attract and support new businesses or retain existing businesses. 

Economic Census forms will be mailed to more than five million companies in December of 2007 with a return deadline mid-February.  The first summary results are usually available 12 to 18 months after the surveys are returned.   For more information about the 2002 Economic Census, visit the Web site at

www.census.gov/econ/census02/guide/index.html.

IFA is the world’s oldest and largest trade group representing the franchising sector.  Its membership includes more than 1,000 franchisors, 8,000 franchisees and 400 suppliers.

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Editor’s Notes: ­   (1) For information about the “Economic Impact of Franchised Businesses,” visit IFA’s Web site at www.franchise.org.  (2) CFE = Certified Franchise Executive.

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