The private equity industry’s success may provide a proactive look to the future. Outperforming the S&P 500, the UNH Rosenberg Center Franchise 50 Index has been positively growing for more than a decade. Created by the University Of New Hampshire William Rosenberg International Center Of Franchising, the Franchise 50 Index records publicly traded companies in the U.S. that engage in business format franchising.
These 50 franchisors represent more than 98% of the market capitalization of all U.S. public companies engaged in business format franchising. The Center’s 2012 year-to-date review shows the RCF 50 Index grew 1.9%, higher than the 13.4% growth of the S&P 500 Index. On a macro level, from 2000-2012, the RCF 50 Index grew positively at 131.1% for the twelve years; while the S&P experienced a 2.3% overall increase. The University of New Hampshire report show shows publically traded companies who conduct business format franchising decreased by 1.7% in the fourth quarter of 2012, while the S&P 500 dropped 1.0% that quarter, buffered by a strong rebound of the financial sector.
A factor not to be ignored in the RCF 50 Index outperforming the S&P 500 for the past eleven years and running is franchising facilitating a business’s ability to expand globally. According to the Rosenberg Center Franchisor 50 Index, Avis Budget Group, the provider of car and truck rentals was the best performing component of the RCF 50 Index in the 2012 fourth quarter by surging over 29% in value driven by improving financial results. The 2012 fourth quarter continued a trend of RCF 50 Index components firms being acquired by larger firms with companies such as Dollar Thrifty Automotive Group, which was bought by Hertz, while Caribou Coffee Company was acquired by German holding company Joh. A. Benckiser.
Activity inside the franchise industry is on the rise. Looking at some recent mergers and acquisitions, it’s clear no industry sector is better than the next. Private equity firms have been, and still are, interested in business to business (B2B), business to consumers (B2C), healthcare, materials and resources, and others.
Interested in learning more about franchising and/or how to franchise (http://www.francorp.com/) your business? Visit http://www.francorp.com to download the free e-book and take the franchise quiz today! For more immediate assistance call 800-FRANCHISE (800-372-6244) to speak directly with a franchise analyst to learn more about taking your business the next level and beyond.