How Does Franchising Impact the National Economy?
Franchising is a major driver of economic growth in the United States. Providing products and services in more than 300 categories, including a myriad of retail concepts, the franchise industry is a significant contributor to the country’s gross domestic product (GDP) and job market.
Franchise businesses produced goods and services worth $868.1 billion in the United States in 2016 and supplied an annual payroll of $351.1 billion, accounting for 3.4 percent of the private sector gross domestic product, according to an International Franchise Association report. Franchise businesses contributed indirectly to the U.S. economy in other ways, too. According to the report, franchises were the cause of more than 16 million jobs, $723.2 billion of annual payroll and $2.1 trillion of annual output, which ultimately accounted for 7.4 percent of the GDP.
Franchising is a significant jobs creator in the United States. One in seven jobs is due to franchising. In 2017, almost 9 million people have jobs thanks to the 801,153 franchise establishments, according to the IFA report.
Job growth in the franchise sector has outpaced growth in all other sectors economy-wide. In the last five years, job growth in the franchise sector was 2.6 percent, annually, which is almost 2 percent higher than all businesses. Looking at it as whole numbers, franchising added almost 1 million jobs to the economy.
Franchising’s hot streak is projected to continue through the rest of 2018.
Franchising and Resale Together
When you combine the booming resale segment with franchising, you have a recipe for success.
In retail, the resale segment is a $17 billion industry and quickly growing. Resale has experienced a 7 percent increase in the number of stores in the last two years.
The appeal of resale shopping has been increasing since the recession in 2008, when the majority of Americans were scaling back expenses. Purchasing gently-used goods at a fraction of the price of regular retail made good sense. Although the recession is officially over, savvy consumers continue to look for good deals on high-quality, gently-used items. The money they save allows them to spend it in other areas of their lives.
Concern for the environment is also fueling an increase in consumers heading to resale stores. Earth-conscious consumers take pride in selling items to be resold as gently-used, as well as buying second-hand items.
Franchising makes a big impact on the national economy, and resale franchise concepts are making their mark, too. Entrepreneurs realize owning a resale shop is a sound investment and take pride in being a major force driving the economy.
Are you interested in a business opportunity in the thriving resale industry that’s contributing to a healthy economy? Click here to learn more about Winmark Corporation’s franchise brands.