Most franchise professionals express a cautious optimism for the industry. As franchising activity is an indicator of health and direction of our economy, we have good reason to expect improvement in the economy generally and in the profitability of small business as well.
The recent International Franchise Association convention in Orlando, Fla., broke all attendance records, demonstrating an increased interest in franchising. The main concern of attendees was access to small business credit. The annual lending shortfall to franchise businesses is estimated at 20 percent, which translates into $2 billion. That means that franchise prospects cannot find funding to open businesses, returning veterans cannot buy franchises to operate and that successful multi-unit operators cannot grow. That also means that entrepreneurs who can find the funding to start their own franchise company cannot find buyers for their new franchise. A “Financial Summit” was held at the convention to address the economic, regulatory and political factors affecting access to credit.
Addressing Needed Changesin Credit Access
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