Franchise growth outpaces GNP in mid-'70s

During the period 1973 to 1978, business format franchises, as an aggregate, increased their sales in real dollars by an average annual factor of 6.2 percent , while the gross national product and overall retail sector increased at average annual rates of 2.5 percent and 2.3 percent, respectively.

These and other findings are the results of a study by the International Franchise Association based on Department of Commerce data. The study involved adjusting franchise sales figures from the Department of Commerce for inflation and comparing them with similarly adjusted figures for retailing and the economy in general. Interviews were also conducted with a number of industry sources.

The study disclosed that over the period 1970 to 1980, franchising increased its share of the GNP from 10 percent to 15 percent. In 1980, franchising's share of the retail market stood at about one-third.

Industries leading the way in expansion were food specialties (baked goods, ice cream, delicatessens, etc.), restaurants, real estate, business services (printing, accounting, tax preparation, and temporary employment), and convenience stores. In these categories, franchised units increased their sales volumes at a quicker pace than the average for all those stores in the category as a whole -- both franchised and nonfranchised.

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