The franchising sector is beating the pants off other industries. According to Hachemi Aliouche, director of the Rosenberg International Franchise Center at the University of New Hampshire, the industry is doing incredibly well, and it has since 2000, when the center started watching.
The school created the Rosenberg Franchise RCF50 Index to track the performance of 50 top franchises. Since then, the index has returned 210.6 percent.
That return is even more attractive when compared with the S&P 500 Index, which returned a paltry 73.8 percent. Over the past 10 years, the index saw an 80.5 percent return, compared with the S&P’s 61.2 percent return. In the second quarter, the RCF50 returned 10.4 percent, surprising even the economists behind the index.
“This is the largest percentage gain of the RCF50 Index in more than four years,” said Aliouche. “This double-digit gain far outpaces the 2.6 percent gain of the S&P 500 Index this quarter.”
The surge was driven by double-digit gains in 20 of the 50 companies that make up the index, companies like Weight Watchers International, which gained almost 115 percent in the second quarter on the heels of a major turnaround effort.
But there were some stinkers too. Hertz Global Holdings lost 34.4 percent in market value amid ongoing financial losses and operational difficulties in a disruptive space.
“Ride-sharing companies such as Uber and Lyft are turning out to be strong competitive challenges and the arrival of autonomous vehicles may pose an existential threat to the car rental industry business model,” said Aliouche.
Even with big names weighing on the index, it shows that franchising is more than just alive and well—it’s absolutely explosive (in a good way).