RIFC 50 Index™ Tumbles 28.7% in Q1 as COVID-19 Pandemic Batters Franchise Sector

Wednesday, May 27, 2020

RIFC 5o Index graph

DURHAM, N.H.—The University of New Hampshire’s franchising sector-focused RIFC 50 Index™ lost 28.7% of its market value in the first quarter of 2020 as the COVID-19 pandemic spread through the United States and the rest of the world, and the country shut down to slow down its deadly advance.

The shutdown disproportionately hurt businesses that are heavily franchised (lodging, restaurant, personal services, gyms, etc.), as people sheltered at home, maintained social distancing and businesses were ordered to close completely or partially across the country.

The pandemic created havoc in the franchise sector as reflected by the heavy losses sustained by the components of the RIFC 50 Index. Forty-nine of the 50 components of the index lost market value this quarter, with 22 of them losing over 50% of their value.

"Only Domino’s Pizza (DPZ) managed to make a gain (5.3%) this quarter,” said E. Hachemi Aliouche, director of the Rosenberg International Franchise Center at UNH’s Peter T. Paul College of Business and Economics.

Though most sectors of the U.S. economy were hurt by the pandemic, some business sectors were not as badly battered as the franchise sector, leading to a large drop in the S&P 500 Index (-19.8%), but not as severe as the drop in the RIFC 50 Index.

The RIFC 50 Index is down 23.4% the last 12 months, down 13.2% over the last five years, up 59.5% over the last 10 years, and up 183.6% since its inception in 2000. Developed and published by UNH’s Rosenberg International Franchise Center (RIFC), it is the first stock index to track the financial market performance of the U.S. franchising sector.

“Our RIFC 50 Index quarterly report offers a succinct look at the financial performance of the U.S. franchising business sector and compares it to the overall market performance represented by the S&P 500 Index,” said Aliouche.

Recent quarterly reports are available on the center’s website at unh.edu/rosenbergcenter/rcf-50-index. To learn more about the center, visit unh.edu/rosenbergcenter and follow @RIFC_UNH on Twitter.