Green Franchise Businesses – Industry Report 2010
Green Franchise Report
The green economy is a fast-growing economic development that focuses on the prevention of environmental pollution, global warming, resource depletion, and ecological degradation whilst also creating jobs and promoting economic growth. As the world continues to be threatened by global warming and other environmental issues it is of critical importance that both economic growth and environmental issues be addressed.
In response to the growth of the green economy, more and more franchised businesses are not only offering green products and services but they are also introducing environmentally friendly practices within their businesses in an effort to reduce their negative impact on the environment.
For the purposes of this report, a green franchise refers to any franchised business that is making a conscious and deliberate effort to reduce their negative impact on the global or local environment or a franchise whose services are aimed at consumers who want to reduce their own negative impact on the environment.
Consumer Demand for Green Products and Services
Before the global economic recession consumers were more conscious of the effect that their purchasing decisions were having on the environment. Interest in products and services offered by green franchised businesses was increasing. Consumer demand indicated to business owners that environmental responsibility was not divorced from successful business and would not erode their competitiveness.
During the recession the expectation of industry experts was that the green industry would lose some of its momentum. It was presumed that consumers would not pay more for eco-friendly products during harsh economic times. Reports have shown, however, that the green economy not only survived but actually thrived as there was a continued consumer awareness of, and demand for, green products and services.
According to research completed by Green Seal Inc. and EnviroMedia Social Marketing, 82 percent of consumers, or four out of five, said they were still buying green products and services – which sometimes cost more – even in the midst of a US recession. This demand sends a clear message to businesses that even when faced with a crisis, consumers are willing to spend extra on greener products. This demand is most evident in younger generations. According to a report by Enviromedia Social Marketing, there are 76 million 18 – 34 year-olds in the U.S. who reward businesses and franchises that introduce green practices1.
The Green Economy
The green economy has a global market value of nearly US $5.2 trillion2. The world’s green economy is growing faster than the economy as a whole, with a profound shift in focus towards emerging green technologies and skills in the areas of alternative and renewable energy, energy efficiency, and green building.
The market value for the U.S.’s green economy is $1,050 billion. The U.S. has the world’s largest green economy which accounts for almost 21% percent of the global total3. There is, unfortunately, no system in place to track how many green franchises exist or how many there are in development. However the International Franchise Association (IFA) believes that the green corner of the franchising industry is certainly growing.
Alisa Harrison of the IFA said:
“We’re seeing it across the board, from existing franchises that are becoming greener to those who are building their whole concept around being environmentally conscious.The green trend has been growing for about 25 years now, but it has only recently become mainstream.” 4
According to a report released today by The PEW Charitable Trusts, the number of jobs in America’s emerging clean energy economy grew nearly two and a half times faster than overall jobs between 1998 and 2007. PEW found that jobs in the clean energy economy grew at a national rate of 9.1 percent, while traditional jobs grew by only 3.7 percent between 1998 and 20075.
In November 2009, the Department of Labor announced almost $55 million in green training grants that will lead to green jobs and spur economic recovery. As part of the American Recovery and Reinvestment Act, $750 million has been made available in additional grants to train American workers for careers in new and green industries.
Hilda L. Solis, Secretary of Labor USA, says:
“As citizens of the world we have a responsibility to halt and undo our prior environmental damage. But, while taking important steps to do this, we also want to figure out ways to benefit our economy. Green jobs, therefore, provide the opportunity to do good while doing well.” 6
A Booz Allen Hamilton study released by the U.S. Green Building Council at Greenbuild 2009 predicts green building will support or create 7.9 million jobs between 2009- 2013 and will contribute $554 billion to the U.S. gross domestic product.7
Graph 1: Depicts the growth of jobs in the US “clean energy” economy from 1998 to 2007 8:
1Enviromedia Social Marketing, Enviromedia Research; Only 3 percent of Americans don’t believe in Climate Change: http://bit.ly/ck9vEW
2 British Columbia’s Green economy: Building a Strong Low-Carbon Future, Feb 2010, Globe Foundation.
4 Entrepreneur Magazine; Franchising’s Green Scene; August 2009
5 The PEW Charitable Trusts; Pew Finds Clean Energy Economy Generates Significant Job Growth; www.pewtrusts.org
6 Hilda L. Solis, Green Jobs, Green Economy, Making it Work, Our Planet, The Magazine of the United Nations Environment Programme – Feb 2010
7 USGBC, Green Jobs Study, Prepared by: Booz Allen Hamilton, www.usgbc.org
8 British Columbia’s Green economy: Building a Strong Low-Carbon Future, Feb 2010, Globe Foundation.