Five key takeaways from IFA’s Economic Outlook Report

The International Franchise Association recently published its annual Economic Outlook Report, which examines the current state of the franchise industry and an economic forecast for the year.

This year’s report is particularly significant, because not only does it reflect on the immense challenges that the franchise industry faced throughout the height of the coronavirus pandemic, but it also showcases a hopeful future for the industry as a whole.

Key findings

Some key takeaways from the report include:

A decline in franchise employment by 11.2 per cent in 2020, losing approximately 940,000 jobs in the industry due to business closures and limited capacity

Franchising contributed $670bn to the U.S. economy in 2020, and still represented three per cent of the national GDP

Economic forecast

FRANdata predicts that nearly all of the economic damage created by the COVID-19 pandemic could be eased in 2021, with significant government assistance. Namely, franchising will open more than 26,000 locations, add 800,000 new jobs, and contribute $447bn to the U.S. GDP

Franchising’s contribution to the economy is forecast to grow by seven per cent in 2021, reaching pre-pandemic levels of economic output by the end of the year

Fast, legislative action on COVID-19 relief could jump-start the economy

“This report highlights franchising’s tremendous potential to lead our country’s economic recovery,” said Robert Cresanti, IFA president and CEO. “Through quick adaptability, scalable technology, and a focus on in-demand products and services, the franchise sector has shown its resilience time and again. In conjunction with smart policies out of Washington, franchises can help Americans get back to work.”