FranNet franchising a job creation engine in down market

CLEVELAND, Tenn. While virtually every sector of the economy remains stagnant in the recession, the franchised business sector is growing with FranNet of Eastern Tennessee’s help -- and those new businesses are boosting the local economy.

The International Franchise Association projects 1,900 new U.S. franchise businesses for 2011, creating 194,000 jobs and adding $33 billion more to the economy. The average new franchise business creates 10 jobs, according to FRANdata, an independent organization that analyzes the franchising sector.

“The overall economic impact of new franchise businesses opening this year is big, but at a local level, these numbers mean real jobs for real people,” said Jerry Bird Owner of FranNet of Eastern Tennessee. “If even 10 new franchises open in our area, that’s 100 jobs -- and that’s huge.”

FranNet, a North American network of franchise consultants that helps corporate workers and executives transition to business ownership, expects to help establish 20 percent more franchised businesses this year than in 2010. FranNet’s growth rate is higher than the overall franchise industry growth rate, expected to reach 2.5 percent in 2011.

Bird and other FranNet consultants report growth in service-oriented franchises that entrepreneurs can run from their homes; those typically have low overhead and buy-in costs. Each new franchise adds substantially to the economy. A business service franchise, for example, creates an average of seven jobs; commercial and residential service franchises create an average of six, according to FRANdata.

“We are seeing great franchise candidates from many age groups and industries, and many of them want to be part of the economic recovery,” Bird said. “Franchising is attractive because it works.”

In fact, franchising creates jobs at a faster clip in down markets than the overall marketplace, the IFA says. After the 2001-05 recession, jobs in franchised businesses grew 40 percent compared to 26 percent in other sectors, said IFA spokesman Matthew Heller.

“Clearly, franchising is the key to job creation,” he said.

About FranNet
FranNet is a privately-held franchised business consulting company. FranNet opened in 1987 and is headquartered in Louisville, Ky. FranNet consultants work individually with clients interested in opening a franchise and use a specific profiling and consultative process to determine a business model unique to each person. For more information, visit www.frannet.com.