Franchising Companies Outperform Broader Market Indexes

Oct. 27, 2011 - PRLog -- ARLINGTON, Va. - - FRANdata has launched a new product called FRANdex, which is an index tracking the performance of the largest 50 U.S. publicly-traded companies that use the business format franchising model.  The announcement was made by FRANdata President & CEO Darrell Johnson today at the "Private Equity Investing in Franchise Companies" event in New York.

The 50 publicly-traded companies chosen for the index represent the top 50 companies by market capitalization with material activity in franchising.  They collectively operate 115 franchise brands. Using 1Q 2006 as a base, the FRANdex market capitalization index outperformed both the S&P 500 and the Russell 2000 indexes.  On a quarter by quarter percentage change basis, the franchise companies in aggregate averaged ½-percent better than the Russell 2000 and nearly ¾-percent better than the S&P 500.

"As we weather this economy, it is a particularly interesting time to study the performance of franchise systems, "said Johnson.  "Small business is a leading indicator of recovery from recession and franchise systems are composed of individual small businesses.  The performance of these publicly-traded companies – and the much larger set of privately-held franchise companies – may be telling us something about where we are headed."

For the complete quarterly newsletter, visit www.frandata.com/FRANdex.