Franchise Statistics

The fact that you are here says that you see the potential and are looking to get your piece of the over 1 trillion dollar franchising market

Franchise Facts & Statistics

• It is estimated that up to 6000 franchise companies operate in the U.S.
• 75 industries use franchising to distribute goods and services to consumers.
• Franchise business account for nearly 50% of all retail sales in the United States.
• 1 out of every 12 businesses is a franchised business.
• Franchise businesses employ more than 14 million Americans.
• Nearly 86% of all franchises opened in 60 industries during the past 5 years are still under the same ownership.
• A new franchised business is opened every 8 minutes of every business day.
• 750,000 franchised businesses in the U.S. generate over a $1 trillion each year.
• In 2000, the median gross annual income, before taxes, of franchisees was in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.
• A 1999 study by the United States Chamber of Commerce found that 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business.
• A US department of commerce study conducted from 1971 to 1997 showed that during that time less than 5% of franchise businesses were closed each year.
• Compare that to a US Small Business Administration study conducted from 1978 to 1998, which found that 62% of non franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc.

U.S. Department of Commerce Seven Year study of Franchise vs. Independent Start-Up Success Rate:

According to the U.S. Department of Commerce, franchise businesses are exponentially more likely to succeed than individual new start-ups, particularly if you look at the figures over a five or seven year period. According to Department of Commerce figures, after seven years 91% of new franchises are still in business, as compared to only 20% of individual new start-up businesses.

Quick Franchise Facts, Franchising Industry Statistics:

• There are an estimated 1,500 different franchisors (franchise business companies) operating in the U.S.
• There are believed to be more than 750,000 franchise businesses in the U.S.
• The franchising industry and businesses employs over 18 million people in the U.S.
• In 2004, it is estimated that franchise businesses were responsible for over 1.5 trillion in economic output.
• The franchise industry accounts for 40% of all retail sales in the US
• A new franchise business opens every 8 minutes of every business day
• Approximately one out of every 12 businesses in the U.S. is a franchise business
• Franchise fact: More than 75 different industries use franchising as a means to distribute goods and services
• The average initial franchise investment is $250,000- excluding real estate.
• The average royalty fees paid by franchisees range from 3% to 6% of monthly gross sales.
• Most franchise companies have fewer than 100 units
• The average length of a franchise contract is 10 years
• Top franchise industry- Fast Food
• Top franchise company- McDonalds