Rise in Franchise Business Index Continues for Fifth Straight Month
FOR IMMEDIATE RELEASE
RISE IN FRANCHISE BUSINESS INDEX CONTINUES FOR FIFTH STRAIGHT MONTH
WASHINGTON, May 22, 2013—The Franchise Business Index (FBI), an index of the economic health of the franchising industry, increased by 0.2 percent in April, boosted by improvements in employment and sales in franchise-intensive industries, the International Franchise Association announced today. The index rose to 109.6 (Jan 2000=100), up 1.7 percent compared with April 2012. This was the fifth consecutive monthly increase in the index.
“Franchise business 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 IFA President & CEO Steve Caldeira. “While we are pleased the index grew for the fifth consecutive month, we remain concerned about the overall rate of growth in both new business formation and job creation. We believe comprehensive tax reform that eases the burden on small business owners by lowering the effective tax rate is essential to strong job and wage growth for all Americans.”
Among other components of the index, credit availability for small businesses and the index of self-employment in the economy both declined slightly after posting gains in March. But the small business optimism index rose, and there was a further drop in the unemployment rate. The March value of the FBI, which initially showed a gain of 0.3 percent, was revised upward to show a 0.4 percent increase due to upward revisions of BLS employment data.
Designed to provide timelier tracking of the growing role of franchise businesses in the U.S. economy, the Franchise Business Index was developed by IHS Global Insight on behalf of the IFA Educational Foundation. The FBI combines indicators of growth in the industries where franchising is most prevalent and measures of the general economic environment for franchising.
“Consumer spending has been stronger than expected given the tax increases that were implemented at the beginning of the year,” said IHS Global Insight Senior Economist James Gillula, “but it will be difficult to maintain the recent pace, since households have managed to increase their spending only by sharply reducing the saving rate.”
About the IFA Franchise Business Index
The Franchise Business Index is a measure of the economic environment for franchise business activity constructed with timely economic indicators that provide a current reading of the industry’s health. It combines indicators of the growth or decline of industries where franchise activity has historically been concentrated with measures of the demand for franchise business services and the general business environment.
The components of the IFA Franchise Business Index for the U.S. include:
- Employment in Franchise-intensive Industries (BLS)
- Number of Self Employed (BLS)
- Unemployment Rate (BLS)
- Retail Sales of Franchise-Intensive Industries (Census Bureau)
- Small Business Optimism Index (NFIB)
- Small Business Credit Conditions Index (NFIB)
Research for the IFA Franchise Business Index and the quarterly forecast reports is underwritten by a grant from Jani-King International to the IFA Educational Foundation.
For more information about the components and the methodology, click here:
International Franchise Association: http://www.franchise.org/
For information about IHS Global Insight: http://www.ihsglobalinsight.com
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.