Join our Waitlist for Expert Advice!

Despite Challenges, Franchising Continues to Rebound in 2014 The sector created an estimated 11,000 new establishments and 150,000-plus jobs in 2013, outpacing the overall U.S. economy in business formation and job growth.

By Katherine Duncan

Opinions expressed by Entrepreneur contributors are their own.

Franchising continues to rebound, but growth is slowing slightly. The number of franchise establishments in 2013 was expected to increase 1.4 percent (vs. 1.5 percent in 2012, the first gain since 2008), according to the International Franchise Association (IFA). The sector created an estimated 11,000 new establishments and 150,000-plus jobs in 2013, outpacing the overall U.S. economy in business formation and job growth. In fact, franchising accounts for roughly 10 percent of new U.S. jobs. Total 2013 sales from the sector were expected to reach $802 billion, up 4.3 percent from 2012.

Entrepreneur's 35th Annual Franchise 500

Franchising "remains a very strong, vibrant industry," says IFA president and CEO Steve Caldeira. "We represent 3.4 percent of all U.S. GDP." He attributes the slowdown to an "outdated" tax code, labor issues and healthcare costs, adding, "We are an important spoke in the wheel, despite some of the public-policy headwinds we're facing."

Credit concerns also continue. In a survey of IFA members, 68 percent of franchisors and 42 percent of franchisees say a lack of access to credit is hindering their ability to expand.

Despite these challenges, virtually every category is seeing growth. The IFA's 2013 Franchise Business Economic Outlook reports that real estate is leading the charge, with economic output up 6.3 percent in 2013. Business services and commercial and residential services were expected to rank first and second in both employment growth and number of new establishments. Caldeira notes that healthcare is also booming: "We have 10,000 baby boomers hitting 65 every day, so in-home healthcare, medical care and assisted living ... continue to grow."

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

At 16, She Started a Side Hustle While 'Stuck at Home.' Now It's on Track to Earn Over $3.1 Million This Year.

Evangelina Petrakis, 21, was in high school when she posted on social media for fun — then realized a business opportunity.

Health & Wellness

I'm a CEO, Founder and Father of 2 — Here Are 3 Practices That Help Me Maintain My Sanity.

This is a combination of active practices that I've put together over a decade of my intense entrepreneurial journey.

Business News

Remote Work Enthusiast Kevin O'Leary Does TV Appearance Wearing Suit Jacket, Tie and Pajama Bottoms

"Shark Tank" star Kevin O'Leary looks all business—until you see the wide view.

Business News

Are Apple Smart Glasses in the Works? Apple Is Eyeing Meta's Ran-Ban Success Story, According to a New Report.

Meta has sold more than 700,000 pairs of smart glasses, with demand even ahead of supply at one point.

Money & Finance

The 'Richest' U.S. City Probably Isn't Where You Think It Is

It's not located in New York or California.

Business News

Hybrid Workers Were Put to the Test Against Fully In-Office Employees — Here's Who Came Out On Top

Productivity barely changed whether employees were in the office or not. However, hybrid workers reported better job satisfaction than in-office workers.