Franchise 50 Index

The RIFC 50 Index Tumbles 28.7% as the Coronavirus Pandemic Batters the Franchise Sector in 1Q 2020

The RIFC 50 Index™ lost 28.7% of its market value in the first quarter 2020 as the coronavirus 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 and maintained social distancing, and businesses were ordered to closed down 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 percent of their value. Only Domino’s Pizza (DPZ) managed to make a gain this quarter (+5.3 percent), as customers under lockdown ordered home delivery more often.

Though most sectors of the US economy were hurt by the coronavirus 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 percent) – but not as severe as the drop in the RIFC 50 Index.

The RIFC 50 Index is down 23.4 percent over the last 12 months, down 13.2 percent over the last five years, up 59.5 percent over the last 10 years, and up 183.6 percent since its inception in 2000.