As America continues to make progress in a post-pandemic world, the International Franchise Association (IFA) wants people to know that franchising is “Open for Opportunity.” To help sustain the effort to promote franchising, the IFA, of which FranNet is a member, recently commissioned a report with the assistance of Oxford Economics. It’s a first-of-its-kind review concerning the very value of the proven franchise business models on the market today. To compile the findings, the study surveyed opinions from more than 4,000 independent franchise owners. Combining their input with data on wage and non-wage compensation, the researchers produced a report entitled, “The Value of Franchising.”
The IFA also developed an executive summary, which showcases five key takeaways from the groundbreaking report. Below is a synopsis of each, as FranNet wants to make sure our entrepreneurial audience hears these valuable industry talking points.
More Than Fast Food
Only a quarter of all concepts are defined as quick-service or fast casual restaurant concepts, which busts the myth that franchises are limited to fast-food chains. Big, nationally recognized brands only account for 16% of the total number of establishments, and almost half are franchise brands with less than 25 locations.
Better Pay and Benefits
Employees of franchise establishments earn more than their non-franchise counterparts, specifically 2.2-3.4% higher in wage earnings. More than 65% have access to health insurance, far greater than the rate offered in the non-franchised world. And more than three-quarters of franchise-based employees are eligible for vacation, PTO, sick leave, and holidays.
A World Without Franchising?
A third of franchise owners who were surveyed stated they would not have started a business without the franchising model, believing it to be crucial to their success as owners. In a world without franchising, it’s estimated there would be a loss of 60,000 businesses, almost a quarter million individual establishments, and nearly two million jobs.
A More Diverse and Inclusive Owners Club
Franchising has helped build a more diverse and inclusive group of business owners, with more than a quarter of all establishments run by persons of color. Thanks to business models where capital is more easily accessed, training and support are readily available, and unfettered entrepreneurism is able to flourish, the industry is producing a much more welcoming climate for women and minority owners.
Franchises benefit their local communities far more than originally thought, and much of the charitable initiatives they back fund organizations in their own territories. Most owners exclusively recruit and hire on a local level, a practice that also extends to vendors and suppliers. Pre-Covid, franchise establishments raised more than $900 million for charitable causes, while sponsoring 18 million hours of donated volunteer time.
As the U.S. continues its steady recovery from two years living under pandemic conditions, it’s clear that franchising has a local impact that can’t be replaced. The key takeaways from the IFA’s report on the value of franchising are clear. There is simply no substitute for the proven business models and sheer economic opportunity available to entrepreneurs. And if this is a route you’d like to pursue, FranNet can help you get started today by setting up a no-cost, no-obligation appointment with a qualified FranNet representative who both lives and works in your area. Together, we can find a franchise ownership opportunity that matches up perfectly with your lifestyle and income-oriented goals.