Franchise Statistics
• Franchise businesses account for nearly 50% of all retail sales in the United States.
• Franchise businesses employ more than 14 million Americans
• There are an estimated 5,000 franchise companies operating in the U.S. doing business through nearly 500,000 retail outlets.
• Seventy-Five industries use franchising to distribute goods and services to consumers.
• 1 out of every 12 business is a franchised business.
• Total sales by franchised businesses is approaching 2-trillion dollars.
• A U.S. Department of Commerce study conducted from 1971 to 1997 showed that during that time less than 5% franchise businesses were closed each 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.
• 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.
• A new franchised business is opened every 8 minutes of every business day.
• 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.
• According to the February, 2005 article by the NFIB, 1 of 4 small businesses with employees have their primary location at home. 85% of small firms are operated by owner-managers.
• From January, 2000 to December, 2004 the index that tracks the performance of the top 50 franchisors increased 34.5% compared to a drop of 20.1% in the S&P 500 during the same period.
If your considering investing in a business, one of your safest bets is a franchise. Franchises are a popular way to launch a new company because they are highly likely to succeed. According to the U.S. Department of Commerce, 95% of franchises are still in business after 5 years. The likelihood a self-launched business will still be in business after 5 years is 47%. Buying a franchise more than doubles your chance to survive as a business owner. And, by picking the right franchise, your chances can improve beyond 95%.
Source: U.S. Dept. of Commerce
