By Darrell Johnson
How’s Your Industry?
Forecasting 2013’s fastest and slowest
franchise growth sectors
D
oes recent history give us a
good basis for what to expect
for franchise development
in 2013? Certainly there is
some guidance that can be taken from
the past few years. After all, we’re 3½
years past the technical end of the Great
Recession, and we have data for the first
2½ years of the “recovery.” (We’re just
starting to compile the 2012 results.)
So let’s see what the data might suggest for 2013.
Based on a sample representing more
than 70 percent of all franchised units at
the end of 2011, the
number of franchised
units increased at a
compound annual
growth rate (CAGR)
of 2 percent between
2005 and 2011. As
we know, and as the
graph clearly shows,
growth significantly slowed starting in
2008, the year the
financial crisis hit.
units between 2006 and 2011, the partyrelated goods/services industry grew the
fastest, followed by clothing and accessories, and baked goods. The growth
rate for party-related goods/services
was driven mainly by two brands, Plan
Ahead Events and BounceU. Both are
relatively young, and as of 2011 operated a combined total of 114 franchised
locations.
Despite being a mature industry,
baked goods, at a CAGR of 6 percent,
was the fastest-growing industry over
the examined period. As of 2011, there
Trends from 2006 through 2011
were about 8,700-plus franchised baked
goods locations. Dunkin’ Donuts and
Tim Hortons grew impressively at a
CAGR of 8 percent and 21 percent,
respectiv Vǒ