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.
Second Quarter 2023
RIFC 50 Index Makes Solid 6.7% Gain in Q2 2023 Confirming Strong Recovery of Franchising Sector
The RIFC 50 Index gained 6.7 percent this quarter with broad contributions across most franchise sectors as 32 of the 50 components made positive gains.
TIts 11.5 percent gain year-to-date confirms the strong recovery of the franchising business sector. The Aaron Company, a leader in the lease ownership business sector, had the best performance this quarter, jumping 45.8 percent in market value, driven by better than expected financial and operational results. On the other hand, fitness operator and franchisor F45 Training Holdings, continues to struggle, losing another 56.9 percent in market value this quarter after repeatedly missing financial expectations.
The RIFC 50 Index is up 6.5 percent this quarter, 11.5 percent YTD, 21.5 percent over the last 12 months, and 61.1 percent over the last 3 years. It is up 49.8 percent and 105.7 percent over the last 5 years and 10 years respectively, and up 434.7percent since its inception in 2000. The RIFC 50 Index significantly outperformed the S&P 500 Index over the last 3 years when the Covid pandemic was widespread, signalling that the franchise business sector may be more resilient than most other sectors of the US economy. However, more recently, the outsize performance of the mega-cap technology companies such as Apple and Nvidia has pushed the S&P 500 Index ahead.
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 2nd Quarter 2023 | +6.5% | +7.6% |
| 1-Year | +21.5% | +17.6% |
| 5-Year | +49.8% | +63.7% |
| 10-Year | +105.7% | +177.1% |
| Since Inception (2000) | +434.7% | +219.1% |
Note:The RIFC 50 Index is updated quarterly. For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
First Quarter 2023
The RIFC 50 Index Starts 2023 with Positive 4.7% Gain
The RIFC 50 Index added 4.7 percent in market value in the first quarter 2023, signaling a continuation of the recovery of the franchise business sector. The Index has now soared 77.1 percent from its March 2020 level when it was heavily hit as a result of the Covid 19 pandemic.
Red Robin Gourmet Burgers (RRGB), the developer, operator, and franchisor of casual-dining restaurants, was by far the best performer this quarter, jumping almost 160 percent, a substantial rebound from last year’s dismal 66 percent drop. F45 Training Holdings (FXLV), the fitness operator and franchisor, on the other hand, was the worst performer, dropping almost 59 percent.
The RIFC 50 Index is up 4.7 percent this quarter, up 1.0 percent over the last 12 months, and up 77.1 percent over the last 3 years. It is up 39.0 percent and up 92.0 percent over the last 5 years and 10 years respectively, and up 402.1 percent since its inception in 2000. The RIFC 50 Index significantly outperformed the S&P 500 Index over the last 3 years when the Covid pandemic was widespread, signalling that the franchise business sector may be more resilient than most other sectors of the US economy.
| Period | RIFC 50 Index | S&P 500 Index |
|---|---|---|
| 1st Quarter 2023 | +4.7% | +7.8% |
| 1-Year | +1.0% | -8.7% |
| 5-Year | +39% | +56.7% |
| 10-Year | +92% | +163.7% |
| Since Inception (2000) | +402.1% | +196.7% |
Note: The RIFC 50 Index is updated quarterly. For more information, contact Dr. E. Hachemi Aliouche, Director, Rosenberg International Franchise Center.
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.
