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Franchise Statistics

The typical franchise, when compared to an un-affiliated business, is more profitable. As a result of extensive surveys conducted by the International Federation Association tells us that:

• 93% of the franchisees say that a franchise gives them an advantage
• 88% recommend a franchise over a non-franchised business
• 83% are happy with their franchise
• 65% would purchase the same franchise over again
• The average yearly income for a franchisee is $91,630
• The average net income for a single unit franchise is $76,000
• The average net income for a multi-unit franchise is $142,000

The IFA list over 75 industries that use franchising to distribute goods and services to consumers. The International Franchise Association has reported that franchising is responsible for 760,000 businesses, 18 million jobs, 14 percent of the private sector employment, and over $500 billion in payroll!

Total sales by franchised businesses are projected to reach over $2 trillion, this year.

One out of every 12 businesses is a franchised business.

There are many reasons to start a business through franchising rather than an individual start-up.

• Name recognition
• Ability to expand easily
• Greater buying power due to mass purchasing
• Start-up training
• Ongoing support of franchise company
• Low start-up costs
• Higher potential for asset appreciation

Statistics support these notions:

• 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.
• Nearly 50% of all retail sales come through franchising.
• One in twelve businesses are a franchise.
• Average initial investment level for nearly 8 out of 10 franchises, excluding real estate, is less than $250,000.
• Nearly 86% of all franchises opened in 60 industries during the past 5 years are still under the same ownership.
• Over 300 franchises are sold every week. Or… every 8 minutes of a typical week a new franchised business is started.
• 750,000 franchised businesses in the U.S. generate almost $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.

Franchise businesses account for 42% of all retail sales in the United States.

Franchise businesses employ more than 8.5 million Americans.

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 U.S. 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 U.S. 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.

There can be no doubt that in many cases opening a franchised outlet is a safer career move then taking a job with a Fortune 500 company!