Franchise Financing Special Report: Keeping Track Of Economic Trends Will Maintain Growth In ‘08

Franchising.com:

Financing is the lifeblood of expansion for franchisors and multiunit owners alike. Whether for advertising and marketing to sell additional franchises, or whether to remodel or build more company stores, without financing there is no growth and development. And, despite the rapid growth of new concepts and new units in the aftermath of the dot.com crash in 2000 and 2001, many forecasts of the economic climate and its effect on business growth in 2008 range from gloomy to dim - especially when it comes to credit and lending.

Factors contributing to this outlook in the near term include the subprime mortgage crisis and housing slump; a lame duck president putting his best spin on a faltering economy; the U.S. dollar declining on world markets; the hedge fund debacle; U.S. consumers saddled by increasing debt loads; and banks tightening their lending policies.

Globally, overall economic uncertainty brought on by events such as $100/barrel oil and political instability in the Middle East, combined with the growing economies of China and India, are stressing markets for both capital and raw materials. Beyond oil, the growing economies of those two giants has pushed up the price of building materials such as lumber and steel - and the price of building new franchise units.

Read Eddy Goldberg’s full article.