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FRANCHISING GROWS 6 PERCENT TO 8 PERCENT IN 1992, DESPITE RECESSION; INTERNATIONAL INVESTORS TO SEEK FRANCHISES FOR EXPORT TO THEIR COUNTRIES

 SAN FRANCISCO, Feb. 8 /PRNewswire/ -- The new chairman of the International Franchise Association (IFA), which represents most franchised businesses, said Friday that revenues and employment among these businesses grew at a rate of between six and eight percent last year, despite a sluggish, recessionary economy. Steve Lynn, chairman and CEO of Oklahoma-based Sonic Corp., will assume the title of IFA Chairman at the organization's annual convention here this week. These estimates are contained in a detailed report on franchising's growth in the U.S. that will be released next month.
 Last year, franchise companies created more than 20,000 new businesses and 100,000 new jobs. Lynn said that franchised businesses continue to be among the most profitable and quickly growing segments of the American economy, now accounting for 540,000 businesses and more than $758 billion in annual sales. He said that this success has drawn entrepreneurs from Europe, Asia and Latin America to San Francisco this week to explore opening American franchises in their home countries.
 "One of the major American exports of the 1990s will be the marketing expertise developed over the years by franchise companies," Lynn said.
 But Lynn warned that recent efforts to pass unduly restrictive legislation aimed at franchising pose a serious threat to its continued vitality.
 He also pointed to the formation of the IFA's Franchisee Advisory Council at this week's convention as a first step toward enabling franchisor companies and their franchisees to resolve differences between them in a constructive and efficient manner, without the burden of unnecessary legislation that could discourage future growth. At the IFA convention yesterday, franchisees from major chains will meet to elect their leadership, and develop a broad agenda for addressing issues of mutual concern between franchisees and franchisors.
 The Franchisee Advisory council will explore ways to increase self- regulation of the industry. The IFA also adopted a much stronger Code of Ethics for its members last November.
 "There is no statistical evidence to support the claims of widespread problems in the franchise industry, or the need for broad, sweeping legislation that would impose a counterproductive, bureaucratic burden upon this successful system of new business growth," said Lynn. "Considering the recent problems in the American economy, it seems reckless to meddle with one of the few key engines of economic growth that is running smoothly."
 To support his claim of a strong an successful partnership between franchise companies and their franchisees, Lynn pointed to a national Gallup survey conducted last year. In it, 94 percent of franchisees said they were successful and satisfied with their business operation, 79 percent described their working relationship with their franchisor as excellent or good, while only six percent characterized it as poor.
 "The bottom line is that more than 540,000 franchise establishments nationwide, the overwhelming majority are quite pleased with their business performance and their franchisor relationship," said Lynn. "I'd be shocked if any other industry or economic segment could boast similar results.
 "That doesn't mean there aren't some legitimate franchisee grievances out there -- the huge size of our system and the dynamics of our business make that a given," he continued. "The newly formed Franchisee Advisory Council will work to strengthen our partnerships and address such isolated problems in the most constructive manner possible. Wholesale government interference in our business relationships at this point would be both destructive and unnecessary."
 -0- 2/8/93
 /NOTE TO EDITORS: The press is invited to attend the opening session of the International Franchise Association Convention, on Monday, Feb. 8 from 8:30 to 10:30 a.m. in the Grand Ballroom of the San Francisco Hilton.
 Following this session, IFA Chairman Steve Lynn and the newly elected Franchisee Advisory Council officers will be available for questions.
 The press is also invited to attend the IFA's annual awards luncheon from 12:30 to 2:30 p.m. in the Hilton's Grand B room. Interview opportunities will also be available during, and following this event.
 /CONTACT: John Reynolds, 202-662-0764, or (at the San Francisco Hilton) John Reynolds or Michael Millican of the International Franchise Association, 415-771-1400; or Dan O'Connell of Robert Marston Corporate Communications, 212-371-2200, for the International Franchise Association/


CO: International Franchise Association ST: California IN: SU:

LR-TS -- NY062 -- 4100 02/08/93 12:06 EST
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Date:Feb 8, 1993
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