Leading the Service Industry Blog

Franchising: A Major Source for Job Creation

by April Scarlett on July 5, 2015

Ever since Isaac Singer launched the first modern franchise business in the 19th century, franchising has become an increasingly significant part of the U.S. and global economies. Singer’s creative approach to helping potential seamstresses overcome the then-huge hurdle of a $120 investment in a sewing machine has morphed into a business model that now accounts for 1 of every 8 private-sector jobs in America.

Those 18 million people are employed in more than 825,000 franchise-based units that deal with more than 1,200 opportunities in 300 business segments. This is more than the total workers in the oil and gas industry, automotive industry, and even the total employment of all companies backed by venture capitalists, such as Microsoft and Google.

While there is a great deal of emphasis on the concept of job creation, it is a simple fact that the franchise component of the economy continues to create more jobs annually than any other business segment. Moreover, these jobs create more than $841 billion in annual output, a major part of our country’s GDP. Additionally, franchises represent a rapidly growing portion of all global business.

Not only is franchising a proven and robust part of the American company, many other firms are now turning to this business model as a preferred source of distribution and long-term growth. As more franchisors offer a greater variety of business opportunities, the local franchisee becomes even more vital to local and regional economic stability and growth.

Why Franchises Expand Total Business Ownership

The free enterprise economic model depends on the innovative business owner who sees a market need, establishes a business to meet that need, and successfully builds a profitable enterprise in doing so. This process is at the root of creating well-paying jobs, increasing the standard of living for consumers and employees, and creating even more opportunities.

Many people have the desire to start and run their own business. There’s seems to be a genetic predisposition in many Americans to be their own boss. However, a large number of these prospective entrepreneurs simply don’t have the experience, knowledge, capital, and/or skill sets to navigate the difficult waters of launching a startup, much less nurturing it through profitable growth.

For tens of thousands of these individuals each year, franchising presents the perfect solution. Even the U.S. Small Business Administration recognizes the vital role franchisors play in creating significant opportunities for aspiring business owners. Joining the right franchise organization as a franchisee is a practical way to minimize the risks of owning and operating a small business. Quality franchisors are committed to helping their franchisees succeed, and they provide proven systems to address many of the common business challenges and processes.

One of the great advantages of today’s franchise market is that the opportunities are not limited to managing 18-year olds flipping burgers. In fact, the breadth of different business opportunities fit a spectrum of individual interests. These include providing services, doing artistic work, manufacturing products, and a wide variety of food and entertainment options.

A Classic Win-Win-Win

The franchise business benefits greatly from the past development of strict quality and compliance guidelines, and established franchisors present some of the lowest-risk business opportunities in the marketplace. A successful franchise presents a winning formula for:

• Companies seeking to expand their brand quickly with limited capital

• Communities receiving additional products and services from reliable franchisees

• Individuals gaining the opportunity to follow their dream of business ownership in a supported environment.

Far more than sewing machines today, the franchise concept has opened and continues to open doors for both aspiring entrepreneurs and rapidly growing companies.