PROFIT MARGINS for franchises were up an estimated 10% to 12% in 2000, and similar growth is expected this year. Recent franchise expansion is being driven in part by female entrepreneurs and co-branding instead of by competition over prime real estate locations.
Women are becoming more business savvy. Thirty years ago, they were just beginning to enter the market in large numbers. Now more than 9 million women own businesses.
Females often make ideal franchisers because franchising requires skills for creating lasting relationships, consensus building and being a good listener. The Washington-based International Franchise Association notes that such abilities often come naturally to women.
With co-branding, franchisers are teaming up to secure sites for operating multiple businesses at a lower cost. Sharing the real estate also eliminates some problems associated with finding new sites.
Other trends affecting growth favorably include an increasing willingness among franchises to locate in inner cities. To succeed here franchise operators adapt products and services to meet the needs of ethnic or minority groups. Until recently many franchises often avoided setting up shop in urban centers.
COMPILED FILES
FRANCHISED BUSINESSES IN AMERICA
252,858 businesses
Kroll Direct Marketing Inc.
Plainsboro, NJ
FRANCHISE OWNERS DATABASE
1.3 million businesses and owners
Walter Karl
Pearl River, NY
FRANCHISED AUTOMOBILE DEALERS
21,163 franchised businesses
Kroll Direct Marketing Inc.
Plainsboro, NJ
FRANCHISED CHAIN AND FAST FOOD RESTAURANTS
100,695 franchised businesses
Kroll Direct Marketing Inc.
Plainsboro, NJ
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CONVENIENCE STORE NEWS
Two franchise selects totaling
43,485 names
Edith Roman Associates Inc.
Pearl River, NY
RESTAURANT BUSINESS
34,149-name franchise select
Edith Roman Associates Inc.
Pearl River, NY
About 2,500 franchise companies do business through more than 500,000 retail locations. Franchises representing more than 75 industries generated an estimated $1 trillion in sales in 2000, or 40% of retail sales, equal to 15% of the U.S. gross domestic product.
Among U.S. franchises, 65% consist of fewer than 100 stores and 49% have under 50 locations.
Texas is the
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