Franchising weathers economic challenges.

The state of the economy in recent months may have caused a case of the jitters among the general population, but judging by the overwhelmingly-optimistic comments shared among those who attended IFA's 48th Annual Convention, there are more opportunities than there are challenges.

While each economic cycle's ups and downs are caused by different conditions, franchising has, historically, outperformed independent businesses during times of economic uncertainty. One major reason is job security. As corporations tighten their belts and reduce their workforces, those who find themselves facing layoffs begin the search for alternatives. One popular alternative is self-employment and it doesn't take long to realize that owning a franchise is a much better alternative than starting a business from scratch.

The continued growth rate of the franchising industry has positioned it as a critical component of economic growth--one that rose above the challenges of the economy when other business sectors could not. That assertion is evident in the data that the IFA Educational Foundation recently-released in volume two of the Economic Impact of Franchised Businesses conducted by PricewaterhouseCoopers.

While you may be most familiar with the figures frequently mentioned in previous columns of the magazine about the overall number of establishments, jobs, payroll, and output from the industry, the comparisons to other business sectors are most telling. The growth rate from 2001 to 2005 and the percentage of those increases compared to how other businesses grew during that timeframe validates the effectiveness of the franchise business model.

Between 2001 and 2005, a period during which our economy faced a year or two of uncertainty, the franchise industry as a whole grew by more than 18 percent and more than 140,000 new franchise establishments began operating in local communities across the country.

What's more indicative of the resiliency of the industry is the fact that the economic output due to franchising grew by more than 40 percent, while all other businesses increased by only 26 percent. Employment in franchising grew by more than 12 percent compared to the 3 percent of other businesses. These growth rates have proven, beyond anecdotal evidence, that franchising is counter-cyclical to an underperforming economy.

The increase in attendance at IFA's trade shows across the country is further evidence of the industry's high performance and the increase in franchise sales. The IFA's oldest trade show, the International Franchise Expo completed its 17th year in Washington last month and again saw healthy numbers of prospective investors. Three other IFA-sponsored trade shows conducted in Los Angeles, Miami and Richmond were launched in 2004, 2007 and 2008 respectively and have all seen significant growth in terms of booth space rented and attendance of potential franchisees.

Those familiar with economic cycles are aware that by the time a recession is declared official, the economy has already started to recover. The worst is likely over for those who have seen any effects on their bottom lines. But through this challenging time for our country, we certainly have a good story to tell. This is a great time to turn the spotlight on what we do and how we contribute to the well-being of the U.S. economy.

To showcase our industry's opportunities, we've launched the first public awareness campaign/specifically designed to elevate the importance of franchising as the most effective and important way to build the economy.

"Franchising: Building local businesses, one opportunity at a time" is the theme of this campaign, which is just getting underway. This will be a significant component of IFA's message to Congress, state legislators and policy makers in the coming year. We look forward to sharing more about this campaign with you as we continue to promote franchising here in Washington and across the country.