Expansion in US business and franchising activity is driving industry demand
Los Angeles, CA (PRWEB) August 16, 2013
Despite the recessionary years of 2008 and 2009, the Franchise Brokers and Consultants industry has experienced revenue growth due to recovering economic conditions over recent years. While the recession did cause a decline in revenue throughout the industry due to reduced consumer spending and a declining number of businesses, activity picked back up. “Following the recession, as consumer spending and the number of businesses increased, potential franchisees and franchisors increasingly demanded franchise broker and consultant services,” says IBISWorld analyst Jeffrey Cohen. Overall, during the five years to 2013, industry revenue increased at an annualized rate of 1.3% to $148.0 million, including expected growth of 2.6% from in 2013. Steady growth as enticed new companies into the industry. In fact, during the five years to 2013, the number of enterprises increased at an annualized rate of 2.3% to 513.
As these trends occurred, profit margins throughout the Franchise Brokers and Consultants industry fluctuated. “Due to declining consumer spending and a lower number of businesses requiring industry services, demand fell and ultimately harmed profitability,” says Cohen. “While these trends reversed during the years after the recession, profit margins have not recovered to their precession levels.”
The Franchise Brokers and Consultants industry exhibits a low market share concentration due in part to the limited economies of scale in this industry. Instead, most industry firms are local operations that meet with prospective franchisees in-person. The proliferation of the internet has allowed some firms to move their operations online to give them nationwide scope. Nonetheless, the industry remains highly fragmented. Currently major operators are FranNet LLC and Francorp.
Over the five years to 2018, expected economic recovery will drive further revenue gains for the Franchise Brokers and Consultants industry. Due to continued increases in consumer spending and the number of US businesses, revenue is anticipated to grow at a faster rate compared to the previous five years. During this time, potential franchisees and franchisors will seek consulting services from industry players. For more information, visit IBISWorld’s Franchise Brokers and Consultants in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes salesmen and brokers that provide introduction services for franchise opportunity sellers with whom they have worked out pay-for-sale agreements. In addition to advice, companies in this industry may also offer financing and franchise research.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.