The franchise industry is on the rise, with 784,802 franchises projected to be in business by year’s end. At the end of 2010, there were 765,723 franchises, according to the 2011 Franchise Business Economic Outlook, published by The International Franchise Association.
The reason? Patrick Walls, chief operating officer of Capriotti’s, said it’s because people want a sure thing.
Investors are more likely to pour their money into these turnkey businesses during uncertain economic times than an independent venture.
“People are comfortable with household names,” Walls said. “They know what they’re going to get.”
When you order a Big Mac from one McDonald’s restaurant, chances are, it will taste exactly the same at a McDonald’s across the country. Franchisors can control the quality and specifications of a product by limiting the suppliers from which franchisees order.