When people think of small businesses, they often picture mom-and-pop shops, local cafés, or family-run service providers. Franchises, on the other hand, are sometimes perceived as corporate-run giants with big budgets and nationwide reach. But here’s the truth:
Franchises are small businesses—just with a head start.
In fact, most franchise locations are owned and operated by individuals in your own community. These local franchisees are small business owners who hire staff, manage day-to-day operations, support the local economy, and build customer relationships—just like independent business owners.
What Makes a Franchise a Small Business?
A small business is generally defined as “an independent business with fewer than 500 employees” (The Office of Advocacy). Most franchise locations fall well within this threshold. While they may carry recognizable brand names, franchise units operate independently, under agreements that give entrepreneurs the right to use that brand’s proven business model.
Here’s what franchised businesses and independent small businesses have in common:
- Both rely on local staffing, suppliers, and community engagement.
- Both must manage profit and loss, budgeting, and operations.
- Both contribute significantly to job creation and economic growth.
- Both face the same pressures of local market competition.
Franchises by the Numbers
Let’s look at how franchises fit into the broader small business landscape:
- There are approximately 33.2 million small businesses in the U.S.
- 10.5% of all businesses in the U.S. are franchises.
- Franchised businesses provide jobs to more than 8 million Americans.
- According to the American Franchises Academy, “most franchises are small businesses owned by individuals and not large enterprises.”
Franchises also generate strong economic output—contributing over $760 billion to the U.S. economy annually. On average, franchise locations bring in more revenue than non-franchised small businesses, with estimated yearly sales of $6.5 million vs. $4.7 million respectively.
Are Franchises More Likely to Succeed?
Starting a business is always a risk, but franchising gives entrepreneurs a way to reduce that risk by working within a tested system. While there aren’t any recent studies that comprehensively address the success and failure rates of franchises, it is fair to say that franchising has promising success rates. Without a doubt, they have a substantial impact on the U.S. economy.
Why Franchising Appeals to Small Business Owners
Entrepreneurs typically have three options when pursuing business ownership:
- Start from scratch
- Buy an existing business (or franchise)
- Invest in a new franchise location
Franchising offers a unique blend of independence and support. You’re still the business owner—but with access to training, support, marketing, operational systems, and the brand recognition that makes customer acquisition easier. It’s small business ownership with a playbook.
Franchisees still need to:
- Sign leases and negotiate commercial terms
- Hire and manage staff
- Maintain compliance with local regulations
- Build a customer base
But they do all this with a roadmap that’s already been proven to work.
Ready to Start a Franchise?
If you’re looking for a small business opportunity with more structure, support, and a higher chance of success, franchising could be the perfect path. And you don’t have to explore it alone.
FranNet’s expert franchise consultants can help you discover the right franchise opportunity for your goals, lifestyle, and investment level. Our services are completely free to you. Schedule a free consultation with FranNet today and take the first step toward owning a franchise!