Franchising 'major Avenue' Pursued By Chains
Written by Jenna Weiner
A new study takes the pulse of franchising and finds that franchisors are still finding a receptive audience with would-be entrepreneurs.
According to a new report by Technomic, franchising news is flying high as it continues to be a major avenue pursued by chains.
The 2011 Top 400 Restaurant Franchise Company Report, in conjunction with Restaurant Finance Monitor, finds that the top 400 franchise companies generated $33 billion in sales in 2010, or 10 percent of the restaurant industry's $361 billion in sales. The top 400 franchises had 27,117 restaurants.
About 87 percent of McDonald's sales came from franchised stores for a total of $28.1 billion in 2010, according to the report. Subway's system, which is 100 percent franchises, saw $10.6 billion generated by franchises.
The report said that as a result of the recession, franchisor have commonly been offering incentives such as credit support and fee reductions for investors. Those practices have continued as traditional credit has become harder for businesses to attain.
Franchising.com said that finding a good match of franchisor and franchisee is extremely important, as both parties must share mutual goals over the long term. The website said that a good relationship has a similar level of commitment to a marriage.
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