Is Franchising Recovering from the Recession?

Here’s some good news: The franchise industry is showing signs of recovering from the worst of the recession, according to the most recently released Rosenberg International Center of Franchising’s Franchise 50 Index. The Index tracks a representative group of the top 50 publicly traded U.S. companies engaged in business format franchising. For the second quarter 2009, the Index climbed 11.1 percent, with gains in 40 of the 50 companies tracked — some gaining more than 100 percent.

The index is still down 1.8 percent over the year; by comparison, the S&P 500 gained 1.8 percent in the same time period. However, since its launch in 2000, the index has gone up 41.2 percent, compared to a 34.1 percent decrease for the S&P 500 over the same time period.

Hachemi Aliouche, associate director of the Rosenberg International Center of Franchising at the University of New Hampshire Whittemore School of Business and Economics, said economic reports of improved credit flows, a stabilizing housing market, and a decrease in the rate of layoffs suggest that the worst of the recession is over.

Within the Franchise 50 Index, the top performer for the second quarter of 2009 was Dollar Thrifty Automotive Group, which gained an amazing 1,106.2 percent. The worst performer was Burger King, which decreased 24.6 percent in market value.

Let’s hope the Franchise 50 Index is an accurate predictor of the economic future for franchising. To read past reports, get the full Index, and access more info from the Rosenberg International Center of Franchising, visit http://wsbe.unh.edu/rcf-50-index