Report Methodology

To measure the economic activity in franchised businesses, we use three databases that contain different types of economic information about business establishments in every industry and every county of the country:

• County Business Patterns, produced by the U.S. Bureau of the Census
• Non-employer Statistics, produced by the U.S. Bureau of the Census
• IMPLAN, produced by the Minnesota IMPLAN Group

These databases were melded with two other sources that indicate franchising activity:

• MarketPlace DVD-ROM, April-June 2006 edition, produced by Dun & Bradstreet
• A Survey conducted in 2006 by the International Franchise Association Educational Foundation

We use the latest version of each government data source available as of December 2007. As a result, the statistics used in the report are based on economic activity that occurred in 2005.

Activity Occurring Because of Franchised Businesses

We use the economic modeling system developed by the Minnesota IMPLAN Group in order to estimate the additional economic activity that occurs outside of franchised businesses as a result of the economic activity that occurs within a franchised businesses. IMPLAN is built around an “input-output” table in which are recorded the purchases that each industry has made from other industries in past years. These purchases in turn spark still more purchases, and so on. When these iterations are complete, the model will have calculated the jobs, payroll and output that occur throughout the economy because of the franchised business.

Regarding Congressional Districts

Our measures are compiled for each county and hence aggregate to totals for each state. The county-level measures also aggregate to totals for a Congressional District when the district consists neatly of whole counties only. However, the county-level measures do not aggregate to a total for a Congressional District when a county falls into more than one Congressional District.

By necessity, therefore, a “Congressional District” in this report refers to a collection of those whole counties any portion of which (other than a de minimis portion) fall in the actual district. For example, Clark County, Nevada is actually composed of all of the 1st and 3rd Districts plus part of the 2nd District; in this study each Congressional District in Nevada is defined as including all of Clark County. In such cases the levels of economic activity in franchised businesses that we compute for the Congressional District exceed those in the actual district.