Experts Say Franchise Business Faces Slow Growth

Summary: With the weak economy, business consultant firm PricewaterhouseCoopers LLP released a report called Franchise Business Economic Outlook for 2009 that revealed that GDP, which is the goods and services produced within a year, is expected to decline by 0.5 percent or $4.2 billion in 2009.

The franchise sector is facing a gloomy outlook this year as economic recession and low consumer spending are expected to get worse until the second quarter, according to franchise experts.

Business consultant firm PricewaterhouseCoopers LLP released a report called Franchise Business Economic Outlook for 2009 that revealed that GDP, which is the goods and services produced, is expected to decline by 0.5 percent or $4.2 billion this year.
 

With the weak economy, the consultant firm said that franchising businesses will decline by 1.2 percent or 10,000. With this decline, the industry is also expected to layoff more than 207,000 employees, adding to the already looming unemployment rate in the country which has reached to 8.9 percent in April.

Analysts have earlier predicted that the franchising sector will face a slow growth this year following the credit crunch incident in September 2008 and the bubble up of the housing industry in 2007.

According to experts, the franchise business was at its peak in 2001 to 2005 when it posted an annual growth of 5.6 percent every year. With its strong growth, the sector has reported more than $835 billion revenue within the said period.

Meanwhile, analysts predicted that the US economy will start to feel a slight recovery in the second quarter but said that more jobs will be lost until 2010.