Fewer franchises is chain reaction to bad economy
10K locations likely to close in first recorded decline for the industry
The number of U.S. franchise locations may fall 1.2 percent to 854,000 in 2009, the International Franchise Association said today. That translates to a loss of 207,000 jobs, or 2.1 percent, and $4.2 billion in economic output, the Washington-based group said.
Franchises in real estate, building and contracting services may experience the biggest drop, while McDonald's Corp., Burger King Holdings Inc. and other restaurant chains may see gains. Tightening credit and the global recession have staunched sales, and borrowing for expansion and renovations is expected to fall 27 percent, the group said.
"After steady growth in the franchise business for the early part of the decade, we're preparing for significant economic challenges in 2009," Matthew Shay, president of the IFA, said on a conference call.
There were more than 864,000 franchised businesses employing about 9.79 million people in the U.S. last year, the trade group said. The franchising industry has grown through previous economic slumps in the 1980s and 1990s, said Alisa Harrison, spokeswoman for the IFA.
The U.S. economy is expected to contract in 2009, and consumer spending may fall through the first half of the year following what may have been the worst holiday-shopping season in 40 years, according to Bloomberg surveys of economists.
Franchisors in eight of the 10 business categories may see locations decline this year, with real estate and building-related chains falling more than 3 percent, the IFA said. Hotels, retailers, food stores and business service providers are forecast to lose more that 2 percent of sites.
Fast-food restaurants are projected to grow by 1.5 percent, while table-service eateries will expand 1.3 percent, as economic output rising more than 2 percent on higher menu prices, the IFA said.
Adjusted for inflation, restaurant industry sales are forecast to fall 1 percent in 2009, the National Restaurant Association said last month.
Recent comments
Fhew, McDonald's is safe. I'll still get to chose between four...
Gus | Jan. 9, 2009 at 11:39 a.m.
- Tuesday on TV 12:13 a.m.
- 'Dancing' will fill out finale 12:13 a.m.
- I'll take doc's advice on mammogram 12:12 a.m.
- Editorial: Winning fans' hearts 12:11 a.m.
- Afterthoughts 12:11 a.m.
- Letters: Barzee case like Jeffs' 12:11 a.m.
- Letters: Trump card for believers 12:11 a.m.
- Letters: Can't erase genetics 12:11 a.m.
- Letters: Rushing to judge Palin 12:11 a.m.
- Letters: MLS not BCS 12:11 a.m.
- Real Champions
- Bronco, Kyle rubber match
- Protests against Phoenix LDS temple
- BYU's Lamb, Jorgensen reprimanded
- Plenty on line for rivalry game
- Time for big matchups in WAC, MWC
- RSL wins MLS Cup on penalty kicks
- BCS at-large bids up for grabs
- Hall, Johnson matchup key
- Fans greet returning Real Salt Lake
- Glenn Beck to enter politics?
213 - RSL wins MLS Cup on penalty kicks
195 - Palin plans tour stop in Utah
178 - Palin's book shows she's unqualified
133 - BYU records with win
132 - Bronco, Kyle rubber match
131 - Protests against Phoenix LDS temple
109 - Officer cleared in Cardall Taser case
103 - BYU cuts Women's Research Inst.
103 - Jazz finally win in San Antonio
99
Associated Press Personal Finance Writer Candice Choi offers gift-giving...
Jared Quayle is a stud. He plays like a beast every time he touches the...
No Phx is not a majority LDS city Mesa is. As far as Tom's comment about...
Lest my Utah friends think I was just going to bang on my own, I think UteFan...
You can read the official declaration online via a photo of the original....
"McFeatters states that what Palin is doing, and doing brilliantly, is being...
don't mean to pick on you but fans from both sides make it easy to despise...
Nick Paulos is a great shooter, and Connor Brady's decent. But Provo and Kyle...
Explain this to me. He claims a utah fan ran on the field and threw a CUP of...
The International Center for Religion and Diplomacy mentioned in this article...
BYU doesn't have to make the U sound anti-Mormon, it's a fact; there is a...

