5 Reasons to Buy a Franchise in 2012

5 Reasons to Buy a Franchise in 2012

NEW YORK (MainStreet) -- Even with predictions the economy in 2012 is expected to be as fickle as 2011's, many companies are still setting their sights on growth, so why shouldn't you?

One of the easiest and more predictable ways to do that is to look for those companies aiming to grow and buy a franchise.

Franchising means you run a business of your own, but with a proven method of success as well as support and marketing assistance from the franchisor.

Joel Libava, a franchise-acquisition consultant and author of Become a Franchise Owner! says franchising means building equity in a business, controlling the circumstances to reach your career goals and dreams and creating an opportunity for your children to join you.

Here are some reasons 2012 is a particularly good time to own a franchise:

1. Credit is loosening.

In 2009, the franchising industry lost 400,000 jobs. Last year, the industry grew at just 0.03%, basically flat, according to Steve Caldeira, CEO of the International Franchising Association.

This year, the industry was projected to grow jobs by 2.5% and economic output by 5%. The number of jobs added will likely come in a little below expectations, but that's better than a decline, Caldeira notes.

"The big issue has been a lack of credit to meet the demand for franchisors' and franchisees' growth." Caldeira says. "We've been working really hard with the banking and lending community regarding that issue, and while credit is starting to loosen up a bit, we still have a long way to go."

Additionally, there is still "trepidation" on the part of franchisors and franchisees to expand due to uncertainty and costs regarding changes in health care and what tax reform will look like in 2012 and beyond, he says.

"That being said, franchising is doing better than most industries because it a proven business model with 40% growth over the past decade across 300 business lines, while also offering aspiring and existing entrepreneurs an opportunity to control their own destiny in a still challenging job market," Caldeira says. "That's why we're seeing a return to growth this year and why we are cautiously optimistic as an industry that the growth will continue to steadily improve in 2012 and beyond," both in iconic and emerging franchise brands.

Caldeira noted that franchises in industries such as health care, automotive, business services and personal services are seeing particular growth.

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