Ads Highlight Franchising's Economic Might

WASHINGTON D.C. (Blue MauMau) - The International Franchise Association, a Washington D.C. lobbying group, has launched a series of advertisements to educate lawmakers and opinion leaders on Capital Hill about the importance of franchising.

“This awareness campaign is designed to illustrate the broad reach of franchising,” said Matthew Shay, IFA president and CEO.  “It is important that lawmakers understand the franchise sector and the impact that certain laws can have on this important segment of our economy.” 

The first ad featured one of the IFA's founders, Dunkin' Brands Inc., along with the testimonial of a successful and satisfied Dunkin' franchise owner. The ad begins, "Franchising made Duke Carvalho’s dream of owning a restaurant a reality. With a background in banking, retail and the service industry, Duke discovered how franchising can link entrepreneurs with strong brands, training and marketing expertise. In 1978, he opened his first Dunkin’ Donuts in Roslindale, Massachusetts. Today, he and his family own and successfully operate 14 Dunkin’ Donuts and Baskin Robbins stores throughout the greater Boston area."

The advertisement ran in the April edition of Roll Call, a newspaper targeting Capital Hill policy makers, as well as the National Journal, a weekly reaching Washington insiders.

The ad quotes the results of a recent PricewaterhouseCoopers survey, a study that the IFA paid considerable sums to conduct. It concludes, "A recent report shows that franchise business growth outpaced the economy as a whole in terms of jobs, payroll and output." The ad copy continues, "In fact, the rate of growth in employment was three times higher for franchise businesses than for the economy as a whole."

There are those outside the association who think such franchise figures are misleading. For one, franchise's rate of job growth was actually less than the growth in U.S. jobs or payroll. It seems that franchised units have been learning how to get leaner compared to the rest of the economy.

Professor Lafontaine, Professor of business economics and public policy at the University of Michigan's Ross School of Business, disagrees with the conclusions of the survey. "Franchises are not growing more than the rest of the economy" declares the professor.

Lafontaine adds that there is a more fundamental problem with attributing such economic activity to 'franchising'. "There would still be restaurants out there if there was not franchising," states Lafontaine. "It is not that franchising is creating all of this [economic activity]."

Despite such disagreements over the numbers, advocates and critics would still agree that this method of chain store structuring is indeed a significant force and is roughly in tune with the economy.

"It is still a healthy growth," Lafontaine concludes.

The second ad (above) features the testimonies of Express Personnel, an Oklahoma City-based employee search franchisor, and two successful women franchisees. It will appear next month in the same journals as its predecessor. Ms. Alisa Harrison, Vice President of Communications & Marketing for the IFA told Blue MauMau that the third advertisement in the series will be placed before the end of the year.

--

Related reading:

• Professor Says Franchising Not Outpacing Economy, IFA Study Not Quite Right