For economy's casualties, franchises offer a brand to build on
November 02, 2008
by Shandra Martinez

A growing business
The $2.3 trillion franchise industry has seen significant growth in recent years, according to the International Franchise Association.

There are more than 3,000 franchise businesses in nearly a million locations, ranging from fast food to business coaching.

Unlike most industries, economic hard times don't reduce demand for franchises. They may even drive demand higher.

"When you buy a franchise, you are buying a proven system, marketing and advertising that you don't get when you are starting out on your own," said Alisa Harrison, spokeswoman for International Franchise Association, the Washington D.C.-based trade organization.

The support is important to newcomers, she said. "It provides a method for people going into business for themselves and not by themselves."

The number of franchise businesses grew by 18 percent from 2001 to 2005, compared with 15 percent growth of independent businesses, according to a 2008 study commissioned by the IFA.

During that same period, the franchises increased employment and economic output faster than independents, the same study found.

The partnership of a franchiser and franchisee is compared to a marriage -- which means things don't always go smoothly and can end in a divorce.

A dispute between an ice cream chain, Cold Stone Creamery, and franchisees turned frosty this year over a fee increase.

Here is a sampling of people who recently became franchise owners:
Steve Herr, 51, Hudsonville
What: Batteries Plus -- A retail chain that sells batteries, battery-related products and offers technical support for custom battery packs.
Opened: December at 3575 Alpine Ave. NW, Walker
Initial investment: $75,000-$150,000
Royalty: 4 percent of net revenues paid monthly
Background: Held marketing and regional director positions.