For Love Of Java

Future Shock

Franchising in the new millennium

By Laura Tiffany

It's time for Y2K predictions again, and this time franchisors are taking a turn. But unlike those ubiquitous bug stories, franchisors are making positive predictions: 1999 unit growth projections of 12 percent, a broader international presence and sales growth in current units.

Franchise Recruiters Ltd., a franchise executive-management search firm in Chicago, asked 100 of the largest U.S. franchisors about the future of franchising in its recent Franchise Business Development survey. The franchisors surveyed are focusing their efforts on strengthening relationships with franchisees while creating new products and services to attract both new customers and investors.

"They're trying to get units to produce more at the store level than they have in previous years," explains Jerry Wilkerson, president of Franchise Recruiters. "It's part of the pattern of growth for any business to concentrate at some point on unit sales instead of just building more units."

On the development front, franchisors are looking overseas and to the future. Wilkerson says the euro will make doing business in Europe easier and more affordable for franchisors. Canada, Mexico and South America also remain prime targets for franchisors seeking international development deals.

Surveyed franchisors also expect more growth in unit development should the U.S. economy experience a predicted downswing. Wilkerson says baby boomers will be an important part of this growth. "Franchising is going to [attract] a sizable group of people," says Wilkerson, "who have the financial wherewithal to basically walk away from what they've been doing, transfer the capital they've been able to save and develop businesses for themselves."

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This article was originally published in the June 1999 print edition of Entrepreneur with the headline: For Love Of Java.

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