How the Franchising Industry Will See an Upswing if COVID-19 is Under Control
- The International Franchise Association’s new report says it may be possible for the franchising industry to get back to pre-pandemic levels by the end of 2021, if COVID-19 is under control.
- The report estimates that more than 26,000 franchised locations will be added to over 780,000 establishments, while franchise employment will rise more than 10% to nearly 8.3 million workers.
- Many of the nearly 800,000 expected new jobs will come from the retail, food and services sectors.
2020 was a tough time for everyone, particularly businesses that are hoping for a turnaround this year. According to CNBC, a new report from the International Franchise Association (IFA) indicates that it might be possible for the franchising industry to get back to pre-pandemic levels by the end of 2021 — if COVID-19 is put under control.
IFA’s annual economic outlook, which was prepared by FRANdata, estimated that more than 26,000 franchised locations will be added to over 780,000 establishments, and franchise employment will rise more than 10% to nearly 8.3 million workers. Many of the nearly 800,000 expected new jobs will come from the retail, food and services sectors, IFA said.
The forecast also projects that gross domestic product of the sector will increase by 7% to $477.4 billion and franchise business output will rise 16.4%, to $780 billion, which would make up for the losses of 2020. “Through quick adaptability, scalable technology and a focus on in-demand products and services, the franchise sector has shown its resilience time and again,” IFA President and CEO Robert Cresanti told CNBC. “In conjunction with smart policies out of Washington, franchises can help Americans get back to work.”
According to CNBC, the majority of the growth this year will come from the commercial and residential services industry, in addition to continued strength from the quick-service restaurant category. But the strength of this recovery, it notes, assumes several factors, including the ability to control the pandemic, vaccine rollout, government aid and pent-up consumer demand.
“It’s important to understand there’s not just going to be this explosive growth as soon as everyone is given the green light,” FRANdata CEO Darrell Johnson told CNBC. “The world has changed, and consumer behavior has changed significantly in certain ways, that it will lead to a different kind of growth coming out of this.”