On the Margin

Franchise restaurants added a lot of jobs last year

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This post is part of the On the Margin blog.

The franchise business model continued to hum along in 2015, and ended the year on a particularly strong note, at least in terms of job growth.

According to the ADP National Franchise Report, franchise businesses added 48,600 jobs in December, second most of any month this year.

And much of that growth came from the restaurant business, which added two-thirds of franchise sector jobs in December, or 32,700. That, too, was the second best month of the year for franchise restaurants.

For the full year, franchise businesses added 376,000 jobs and franchised restaurants added 215,000 jobs.

ADP, the human resources firm based in Roseland, N.J., tracks franchise jobs monthly in collaboration with Moody’s Analytics, and gets the reports from transactional payroll data.

Franchises and restaurants in particular have been adding jobs at a rate higher than overall employment for some time, and in December the gap was notably stark.

ADP said that private employers added 257,000 jobs in December, a monthly growth rate of 0.2 percent, similar to the growth rate for much of the year.

But franchises, by contrast, added jobs at a 0.6 percent growth rate. And franchise restaurants added jobs at a 0.7 percent growth rate.

The numbers represent the best evidence overall that the restaurant industry is strong right now. Companies don’t add employees if they’re not confident in future sales, after all.

The numbers also should alleviate concerns, at least for now, that higher wages are preventing companies from hiring. That said, the employment growth is intensifying competition for restaurant workers, which is conspiring with higher minimum wages to drive up labor costs.

Contact Jonathan Maze at jonathan.maze@penton.com
Follow him on Twitter at @jonathanmaze

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Jonathan Maze

Jonathan Maze covers finance for Nations Restaurant News, as well as restaurant chains based in the Midwest. Jonathan came to NRN in 2014 after seven years covering restaurants for Franchise Times...
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