A report, commissioned by the US International Franchise Association, compiled by IHS Economics, a well-known forecasting firm, projects that the franchise sector will outperform the overall economy next year by 5.1% gain against a projected US gross domestic product increase of 3.1%.
Out of the 10 major franchise sectors that the IHS research tracked, the following six will see the most growth:
Personal Services (+1.9%)
This includes personal service businesses such as spas, hair salons, senior and childcare, tutoring, etc., with an emphasis on the needs of the growing disposable income of the aging population.
This sector, which includes major hotel and motel chain franchises, is set to grow as the US economy improves.
Business Services (+1.7%)
Spurred on by the increasing numbers of self-employed workers who do not operate out of offices and who require business-to-business services, this sector ranges from accounting & tax services, courier services to staffing services and business coaching.
Quick Service Restaurants (1.6%)
Still considered the flagship of franchising, this sector represents one-fifth of all franchise units and is responsible for 40% of franchise employment. As consumers look for better-quality fast food, there is a strong trend in the upscaling of fast food – whether it’s for artisanal breads or gourmet burgers.
Retail Products & Services (1.6%)
The overall economic improvement of 2015 and a similar growth pattern for 2016 will see more and more growth in the franchised retail space.
Commercial & Residential Services (1.6%)
Known to us as the Building, Office & Home Services this sector is also strongly affected by the improvement in the economy.