Franchise Facts

The International Franchise Association (IFA) Reports:

U.S. Sales:
  • More than $800 billion in annual sales
  • 40.9% of all retail
  • Total franchise sales over 1 Trillion
Franchise Growth:
  • 1 in 12 business establishments is a franchise
  • A new franchise opens every 8 minutes of every business day
  • There are approximately 1500 Franchisors and 550,000 Franchisees
Employment:
  • More than 8 Million people are employed by franchise businesses
  • The total number of people employed in franchising is approaching 8 Million, with 8 to 14 employed per business.
  • Franchised businesses create more than 170,000 new jobs each year.
Success Studies:
  • According to the U.S. Commerce Department fewer than 5% of Franchises were terminated on an annual basis
  • In a study by Arthur Anderson & Company of 366 franchise companies, nearly 97% were still in business after 5 years.
  • In contrast, a study by the U.S. Small Business Administration revealed that 62.2% of all new businesses failed within their first 6 years of business.
The Last Recession:

Franchising in the Economy, 1991-93, a study conducted by the University of Louisville, indicated “franchising not only participated in, but helped to lead America out of its economic downturn”. As people once again are downsized and re-engineered they will need to replace their employment through franchising.

The Trends:
  • Economic slowdown and skepticism about job security is driving franchising.
  • The franchise industry today is breaking away from the “Mom & Pop” industry of the past and is being replaced by corporate executives. 50% of all franchises are multiple unit owners.
  • 87% of franchisors indicated that lead quality is up this year an average of 50% over the previous year.
  • Of the 47% using broker referral networks (up 3% over last year), 50% have chosen deals with them.