The RIFC 50 Index, initially published in 2002 by the Rosenberg International Franchise Center (RIFC), is the first stock index to track the financial market performance of the US franchising sector. It is published quarterly.
4th Quarter 2022 | 2022 Review
The RIFC 50 Index Ends 2022 with a Strong 11.9 percent Return in the 4th Quarter. Planet Fitness Delivers an Outstanding Performance
The franchising sector appears to be recovering robustly in the 4th quarter 2022 as signaled by the strong performance of the RIFC 50 Index this quarter. The RIFC50 jumped 11.9 percent with a broad-based participation of all major business sectors and most individual Index components. Out of 50 franchise companies comprising the Index, 34 had positive returns, 24 of which were double-digit.
These strong results significantly outperformed most other sectors of the US economy as represented by the S&P 500 Index, which grew 7.1 percent this quarter. Despite a still challenging macro environment, declines in energy prices, other signs of slowing inflation, and indications that the Federal Reserve may slow its aggressive interest rates increases, provided a boost to businesses, consumers, and equity markets.
Many Index components had outstanding performances this quarter. Planet Fitness, the operator and franchisor of fitness centers, grew its market value 36.7 percent this quarter, strongly lifted by solid financial results, with revenues and profit growth that surpassed analysts’ expectations.
The food sector was the best performer among the major franchise business sectors, returning an average 14.4 percent gain this quarter. Most QSR companies had strong results, including Burger King’s and Tim Horton’s owner Restaurant Brands International (+21.5 percent), Wendy’s (+20.9 percent), Yum!Brands (+20.3 percent), and McDonald’s (+14.2 percent).
Two Index companies were acquired this quarter: BBQ Holdings by MTY Food Group, and Terminex by Rentokil Initial Plc.
Despite the strong rebound in the 4th quarter 2022, the RIFC50 still had a negative performance for the full year 2022, dropping 11.5 percent, as the first three quarters of the year had negative returns. Nevertheless, this compares favorably to the S&P500’s negative 19.3 percent return in 2022.
The year 2022 was a particularly challenging year for most businesses, with high inflation, rising interest rates, labor shortages, supply chain bottlenecks, and armed conflict in Ukraine. However, it appears that the franchising sector navigated these macro challenges better than most other business sectors.
The RIFC 50 Index is down 11.5 percent over the last 12 months, and up 20.5 percent over the last 3 years. It is up 27.2 percent and up 107.6 percent over the last 5 years and 10 years respectively, and up 379.7 percent since its inception in 2000.
RIFC 50 Index and S&P 500 Index: Total Returns
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 4th Quarter 2022 | +11.9% | +7.1% |
| 1-Year | -11.5%% | -19.3% |
| 5-Year | +27.2% | +43.6% |
| 10-Year | +107.6% | +169.2% |
| Since Inception (2000) | +379.7% | +175.3% |
Note: The RIFC 50 Index is updated quarterly. For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
Third Quarter 2022
RIFC 50 Index Component Wingstop has a Blockbuster Quarter while Hilton and Hyatt have Robust Performances Despite Challenging Business Environment in 3rd Quarter 2022
The franchising business sector, like most other business sectors, is attempting to recover from the severe double digit losses sustained in the second quarter of 2022.
This quarter, the RIFC 50 Index, reflecting the performance of the US franchising sector, lost “only” 2.6 percent, while the S&P 500 Index, reflecting the general US financial markets, lost 5.3 percent. Twenty one of the 50 components of the RIFC 50 Index made positive gains this quarter, a big improvement from last quarter when only one component had made gains. High inflation, increasing interest rates, labor shortages, and global conflicts continue to challenge most businesses, including franchised businesses. A majority of travel-related components, such as Hilton (+8.4 percent) and Hyatt (+9.5 percent), though, had robust performances this quarter, benefitting from the resurgence of leisure travel and tourism following the fading Covid pandemic. Overall, restaurant operator and franchisor Wingstop had the best performance this quarter, jumping 67.6 percent, boosted by a new successful menu and a strong financial outlook. The RIFC 50 Index is down 21.0 percent year-to-date, and down 11.8 percent over the last 12 months. It is up 22.9 percent and up 82.3 percent over the last 5 years and 10 years respectively, and up 328.6 percent since its inception in 2000.
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 3rd Quarter 2022 | -2.6% | -5.3% |
| 1-Year | -11.8% | -16.8% |
| 5-Year | +22.9% | +42.3% |
| 10-Year | +82.3% | +148.9% |
| Since Inception (2000) | +328.6% | +157.1% |
Note:The RIFC 50 Index is updated quarterly. For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
Second Quarter 2022
Franchise Sector Battered in Q2 2022 as Financial Markets Dip into Bear Market Territory
H&R Block Bucks the Trend With 36 Percent Gain
Most US business sectors took a severe beating this 2nd quarter 2022, battered by historically high inflation, increasing interest rates, continuing supply chain disruptions, labor shortages, and global conflicts.
The RIFC 50 Index took a steep drop, falling 11.5 percent, reflecting the challenging conditions facing franchised businesses. Most other US business sectors were hit even harder as is reflected by the 16.5 percent fall in the S&P 500 this quarter, pushing this index into bear market territory. Almost all components of the RIFC 50 index lost market value this quarter, most by double digits. Tax services provider H&R Block was the standout component this quarter, gaining 36 percent in market value, fueled by strong financial results and a favorable outlook. The RIFC 50 Index is down 18.9 percent year-to-date, and down 4.9 percent over the last 12 months. It is up 28.3 percent and up 91.8 percent over the last 5 years and 10 years respectively, and up 339.9 percent since its inception in 2000.
The RIFC 50 Index is up 39.3 percent over the last 12 months, up 60.2 percent over the last five years, up 108.7 percent over the last 10 years, and up 362.5 percent since its inception in 2000.
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 2nd Quarter 2022 | -11.5% | -16.5% |
| 1-Year | -4.9% | -11.9% |
| 5-Year | +28.3% | +56.2% |
| 10-Year | +91.8% | +177.9% |
| Since Inception (2000) | +339.9% | +171.5% |
Note:The RIFC 50 Index is updated quarterly.For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
First Quarter 2022
Dunkin’ Record Inflation, War in Ukraine Batter RIFC 50 Index in First Quarter 2022
The RIFC 50 Index dropped 8.3 percent in the first quarter 2022 after a very strong 4th quarter 2021. Inflation surging to 40-year highs, impending interest rate hikes by the Federal Reserve, and Russia’s invasion of Ukraine rattled global financial markets, with all major US and international indices taking heavy losses.
Inflationary fears were exacerbated by this first major conflict in Europe since World War II as it threatened the supply of essential commodities such as oil, wheat, corn, and natural gas. Most domestic and international business sectors and companies were negatively impacted – with many companies taking severe blows to their operations and market values. Two of the heavyweight components of the RIFC 50 Index (McDonald’s and Yum!Brands) were particularly impacted by the conflict as they suspended their operations in Russia and Ukraine – contributing to their large losses in value this quarter, with McDonalds losing almost $17 billion in market value while Yum!Brands dropping almost $7 billion. Thirty-six components of the Index lost value this quarter while only 14 made gains. Despite this sizable drop this quarter, the RIFC 50 Index is still up 11.0 percent over the last 12 months. It is up 60.0 percent over the last five years, up 102.9 percent over the last 10 years, and up 397.0 percent since its inception in 2000.
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 1st Quarter 2022 | -8.3% | -4.8% |
| 1-Year | +11% | +14% |
| 5-Year | +60% | +91.8% |
| 10-Year | +102.9% | +221.7% |
| Since Inception (2000) | +397% | +224.9% |
Note: The RIFC 50 Index is updated quarterly. For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
