U.S. Census Bureau Issues Report On Franchising

For the first time ever, the U.S. Census Bureau issued a report today on the nation's franchised businesses.  The report, entitled the Economic Census Franchise Report, found that franchise businesses account for 10.5 percent of all businesses operating in the U.S., and nearly 17 percent of the total amount of sales made in the country, with nearly $1.3 trillion dollars in sales annually. Unsurprisingly, restaurants (both quick- and full-service) accounted for the largest portion of franchised establishments overall, followed by convenience stores.  Automobile dealers accounted for the largest portion of sales in dollar terms.

The Census Bureau began collecting the data that forms the basis of its report in 2007, at the urging and insistence of the International Franchise Association (IFA).  This report marks the first time the Census Bureau has released the information that it has collected.  The IFA plans to merge this data with information that it independently compiles on an annual basis using an independent accounting firm.  According to the IFA's statistics, the Census Bureau's data is low — the IFA estimates that franchises account for almost 30 percent of all sales made in the U.S., and account for 22 million jobs. 

Regardless of which measure is used, it is clear that franchising accounts for a substantial portion of the country's economic activity.  Let's hope congress understands this, as well as the needs of small business owners overall, as they debate the extension of the Bush-era tax cuts and other economic relief issues currently on the floor.

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