FRANdata in the Press
A relatively misunderstood business model, with a paucity of academic support, franchising is on the precipice of history. Defined by the Federal Trade Commission as an ongoing commercial relationship that includes a license to a brand, payment of a modest fee and the existence of significant control or support, the average consumer knows it as Subway, McDonald’s or Anytime Fitness.
The S&P 500 which has historically returned 7-10% annually is being consistently outperformed by the FRANdex, which tracks the performance of 62 U.S.- based publicly-traded franchise companies. Here are 5 franchise stocks to watch in 2018.
Each year we work with FRANdata to compile a list of the country’s largest multi-unit franchisee organizations. Based on total unit count, the rankings show not only the number of units these “mega” franchisees operate, but also their brands.
International concepts looking to break into the US market should engage the right partners and franchise experts.
Location, location, location. Once location was king. But industry ‘disruptors’ and online business have been gamechangers, says Darrell Johnson CFE, CEO of FRANdata.
“We have seen explosive growth in the home care and senior care market, largely driven by franchise brands and franchisees seeking to capitalize on the aging U.S. population,” says John Reynolds, president of the International Franchise Association’s Franchise Education & Research Foundation. FRANdata states there are about 90 senior care franchise brands with more than 6,200 franchises across the United States. The average age of these brands is 8 to 9 years old.
Some creative and precocious millennial minds have discovered an alternative to traditional entrepreneurship: franchising. According to FRANdata, a market research firm that analyzes franchise performance and operations, 9 percent of all franchises are currently owned by millennials, and the trend is growing. Over the next 10 to 15 years, the majority of existing franchisees will be approaching retirement, while in that same timeline, more millennials will reach the capital threshold needed to invest in a franchise.
Ritwik Donde, senior research analyst at FRANdata, says starting out in the franchise business through a home-based brand, or a mobile concept—which are what most low-cost franchises look like—would help first-time franchisees eliminate lease/mortgage costs.
U.S. franchise brands are increasingly providing financial performance data to prospective investors and lenders, helping create more transparency for prospective franchise owners and greater access to capital from lenders, according to a new report by FRANdata conducted for the Franchise Education and Research Foundation. The report shows franchise companies are increasingly seeing the value of disclosing certain financial information to prospective investors and lenders under “Item 19” in their Franchise Disclosure Documents (FDDs), without the regulatory requirement to do so.