Report: Franchise Jobs Grow at Twice U.S. Rate

A new report today from ADP and Moody's shows the franchise industry added nearly 20,000 jobs in May.

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By Catherine Clifford

Opinions expressed by Entrepreneur contributors are their own.

The franchise industry just might be the job-generating gorilla in the room.

The number of franchise jobs in the U.S. grew at an annual rate of 2 percent in the last year through May, approximately twice that of overall job market, says Mark Zandi, chief economist at market-research firm Moody's Analytics. Franchises overall provide 8 million jobs, or six percent of the job base in the U.S., according to Zandi, who spoke at the Franchise Expo in New York City this morning. Meanwhile, the franchise industry was responsible for 10 percent of job growth in the U.S. over the past year through May, he says. The franchise industry is doing "more than its fair share" in getting Americans back to work, he said.

In May, the franchise industry added 19,160 jobs, according to a new monthly employment report from payroll processor ADP, released today for the first time in collaboration with Moody's. The report is based on ADP payroll data from 15,000 franchisors and franchisees which collectively employ 1 million workers in the U.S. The results are currently not adjusted for seasonal hiring fluctuations.

The report measures employment across 15 franchise sectors, including accommodations, restaurants, real estate and auto parts. Business services, restaurants and food retailers grew more than any other sectors, adding 17,590 jobs in May, or 92 percent of the total franchise jobs added in the month.

The franchise industry has been concerned about the impact of health-care reform on franchisors and their employees, says Zandi. Employers with 50 or more full-time employees have to provide health insurance to their employees or risk paying a fine. There has been concern that franchisors will jigger with their full-time headcount to stay under that threshold.

"Based on the data that is coming from the franchise information, it is not obvious to me that the health-care reform law is having a big impact, at least so far," said Zandi. "The script is still being written and we will still have to see," he said.

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

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