|Title:||United States distribution of jobs in business format franchises by segment in percentages for 2007|
Start of full article - but without data
Distribution of Jobs in Business Format Franchises, 2007
Commercial & Residential Services X.X% Retail Products & Services X.X% Real Estate X.X% Retail Food X.X% Personal Services X.X% Lodging X.X% Business Services XX.X% Table/Full Service Restaurants XX.X% Quick Service Restaurants XX.X% Automotive X.X%
Note: Table made from pie chart.
In the April and May issues of Franchising World, we looked at the economic impact of franchising on the nation's economy, in terms of establishments, jobs, payroll, economic output and GDP. Based on the 2007 Economic Census, with additional data and analysis provided by PricewaterhouseCoopers, we learned that more than XXX,XXX establishments in franchise systems contribute directly and indirectly nearly XX million private nonfarm jobs to the U.S. economy, or X in X jobs. These businesses also generated more than $X.X trillion of private nonfarm output, or X percent of the total. We also learned that franchise businesses play an out-sized role in terms of their economic footprint in many states and congressional districts, contributing XX percent or more of the work force, payroll and economic output.
This month we take a look at the economic impact of franchising by lines of business.
The Economic Impact of Franchised Businesses, Vol. III, prepared by PricewaterhouseCoopers for the IFA Educational Foundation, provides a wealth of data about franchise business activity at the national, state and congressional district levels and also by lines of business. The report first divides franchising into two big business categories: business format franchises and product distribution franchises (see Chart A).
Business format franchising was the model for most of the establishments--XXX,XXX, or XX times as many establishments as product distribution franchising. Business format franchising also provided more than five times as many jobs--X.X million jobs compared to X.X million jobs. Business format franchises also generated four times as much economic output and four times as much to GDP than product distribution franchises. Business format franchises generated $XXX.X billion in output and $XXX.X billion of GDP compared to product distribution franchises that generated $XXX billion of output and $XX.X billion to GDP.
When indirect impact is factored in to these totals, including economic activity that occurs because of business format franchises, this sector provides nearly XX million private, nonfarm jobs and $X.X trillion of private nonfarm output, and $XXX.X billion of private nonfarm contribution to GDP.
The PwC report also presents estimates for XX lines of business for 2007 (see Chart A).
Within the business format franchising category, Quick Service Restaurants provided more establishments and jobs, and also generated more output and contributions to GDP than any other single line of business. Quick Service Restaurant franchises provided XXX,XXX establishments, X.XX million jobs, $XXX.X billion of output, and $XX.X billion to GDP. This amounted to XX.X percent of all establishments, XX percent of all jobs, XX percent of all output, and XX percent of all GDP. (see Figures X and X.)
Quick Service Restaurant franchises also played a large role within their industry segment--providing more than XX percent of all QSR establishments and more than XX percent of all jobs.
Within the business format franchising category, the two other largest lines of business by employment are Table/Full Service Restaurants, with XX percent of all jobs (XXX,XXX), and Business Services, with XX percent of all jobs (XXX,XXX).
Business Services also provided the second largest amount of output--XX percent or $XXX billion, and GDP-XX.X percent or $XX.X billion--within the business format franchising category. Business Services also provided the largest percent of payroll compared to other lines of business--XX percent or $XX.X billion.
Table/Full Service Restaurants provided XX.X percent of all establishments and XX percent of all jobs in their industry segment. Business Services provided X.X percent of all establishments and X.X percent of all jobs in their industry segment.
Many franchises play a large role in their particular industry segment, as noted above with Quick Service Restaurants. Franchises in the Lodging line of business provided XX percent of all establishments and XX.X percent of all jobs in their segment. Franchises in the Retail Food line of business provided X.X percent of all establishments and X percent of all jobs.
Most establishments, XX percent, that use the business format model were owned by franchisees and XX percent were owned by the franchisor. Franchisee-owned establishments outnumbered company-owned establishments in every line of business. Similarly, franchisee-owned establishments provided more jobs (XX percent), more payroll (XX percent), more output (XX percent), and greater contribution to GDP (XX percent) than franchisor-owned establishments.
Non-Employer Businesses, Independent Contractors, and Additional Industries
We are still learning many things about the types of businesses that make up the franchising industry. One of the most interesting insights from PwC's work on the economic impact study were the types of businesses, independent contractors, and additional industries that were not covered in the Economic Census.
The 2007 Economic Census included X,XXX industries, of which XXX industries were selected to receive Census surveys which included questions about the business' franchise status. With additional work, PwC identified XX industries that were not included in the Census survey. These additional industries provided an estimated XX,XXX establishments, XXX,XXX jobs, and $XX billion in sales. The IFA Educational Foundation and PwC are working with the Census Bureau on the 2012 Economic Census to include these lines of business and also to address other questions about non-employers and independent contractors.
The Economic Census only covers businesses with paid employees. However, many U.S. businesses operate without employees. These businesses are known as nonemployers, such as family run businesses and some independent contractors. According to the Census Bureau, XX.X percent of all U.S. businesses were nonemployers, XX.X million businesses compared to X.X million businesses with paid employees. PwC used supplemental data, including the Survey of Business Owners (SBO) and the 2007 edition of Nonemployer Statistics, to estimate the number of nonemployer franchises and independent contractors in the franchising sector. PwC estimates there were XXX,XXX nonemployer franchise establishments in 2007, or about X.X percent of all non-employer businesses.
In addition to the non employer businesses, there may be independent contractors who would not self-identify as franchises on the Survey of Business Owners. For example, these contractors include real estate agents, beauticians, and car dealers who work out of franchise establishments owned by others. PwC estimated there were XXX,XXX independent contractors working for franchised establishments in four industries--offices of Real Estate Agents and Brokers, Hair, Nail and Skin Care businesses, Automobile Dealers, and Other Motor Vehicle Dealers. More than half of these were in the real estate industry.
Looking ahead to the 2012 Economic Census, gathering additional information on these additional industries, non-employer businesses, and independent contracts will shed further light on the scale and scope of the franchising industry.
Chart A-Lines of Business
Business Format Franchising
Includes motor vehicle parts and supply stores, tire dealers, automotive equipment rental and leasing, and automotive repair and maintenance
Commercial and Residential Services
Includes building, developing, and general contracting; heavy construction; special trade contractors; facilities support services; services to buildings and dwellings; and waste management and remediation services
Quick Service Restaurants
Includes limited-service eating places, cafeterias, fast-food restaurants, beverage bars, ice cream parlors, pizza deliver), establishments, carryout sandwich shops, and carryout service shops with on-premises baking of donuts, cookies, and bagels
Table/Fall Service Restaurants
Includes food and beverage stores, convenience stores, food service contractors, caterers, retail bakeries, and beer, wine, and liquor stores, as well as gas stations with convenience stores
Includes hotels, motels, and other accommodations
Includes lessors of buildings, self-storage units, and other real estate; real estate agents and brokers; and property management and other related activities
Retail Products and Services
Includes furniture and home furnishings stores, electronics and appliance stores, building material and garden equipment and supplies dealers, health and personal care stores, clothing and general merchandise stres, florists and gift stores, consumer goods rentals, photographic services, and book and music stores.
Includes printing, business transportation, warehousing and storage, data processing services, insurance agencies and brokerages, office administrative services, employment services, investigation and security services, tax preparation and payroll services, and heavy equipment leasing.
Includes educational services, health care, entertainment and recreation, personal and laundry services, veterinary services, loan brokers, credit intermediation and related activities, and personal transportation
Product Distribution Franchising
Automotive and Truck Dealers