The franchising industry is a booming business sector. The market has been bullish for quite some time now, only to be bolstered by the pandemic and the ensuing Great Resignation in the past couple of years. It shouldn’t come as a surprise to those paying attention. Franchises have proven to be a sound investment, the perfect marriage of tried-and-true business models and locally owned operations. Franchise businesses provide support and reinforcement for the small business community while retaining a “shop local” customer base. They bring unique goods and services to these local communities, provide jobs, and are affordable for nearly any budget.
In light of this recent success, let’s look at some statistics that demonstrate how the franchising continues to blossom – with some statistics that reveal the industry’s reach.
- Franchising in the U.S. and Global Markets
From fast food to fitness, franchises are rapidly expanding. In the U.S. alone, there are over 770,000 active franchise outlets that can be traced back to approximately 3,000 different parent corporations. America, being known for its entrepreneurial spirit, serves as a home base for 18 of the top 20 franchises in the world! Did you know this next statistic? Franchises account for about half of all retail sales in the U.S.
- Support-to-Affordability Ratio
Reasons for the popularity of the franchise model are multi-faceted. Their support-to-affordability ratio of the opportunities themselves put them in unique company among other successful operations. Franchise royalty fees on average are 3%-6% of gross monthly sales. The franchisee is free to roll the rest of profits right back into the business, feeding its internal success. Total investments of approximately $250,000 are required for more than half of the franchise concepts on the market today, but financing options are abundant – especially when they’re coupled with incentives for small business start-ups. Franchisors have a vested interest in the success of their franchisees and provide crucial support such as training, location scouting, marketing tools, and more — depending on the particular parent corporation.
- Food & Fitness Around the World
The food service industry hosts several well-known global franchises. In fact, of the top 10 franchises today, only three aren’t food related. McDonald’s is still the most popular franchise in the world, with over 38,000 locations worldwide. But quick-service competitor Subway sells 7.6 million sandwiches per day. The fitness industry isn’t far behind – Anytime Fitness just opened the first ever franchise location in Antarctica! Then again, it’s hard to ignore the popularity of 7-Eleven, with an unbelievable number of locations. They recently opened their 71,100th location. With numbers and reach like this, it’s hard to argue franchising’s remarkable success rate.
- Franchising and the GDP
Throughout the U.S., 10.5% of all businesses are franchises, and they account for 3% of the country’s Gross Domestic Product. These numbers aren’t surprising, considering how, on the heels of the pandemic, many exited the workplace, choosing to work for themselves instead. Franchising has now found its way into an ever-growing list of service providers. Even accounting and package shipping! Restaurants, carpet cleaning, home repair, hotels, catering…you name it, there’s probably a franchise concept that markets it. Founding a startup has never been easier.
You may wonder what you can do to increase your chances of success in franchise ownership. With so many options for franchising available, a great place to start is by brainstorming some areas of interest. Many franchisees have worked with a broker to help them find the right fit, who can help them navigate uncharted paths that include everything from securing a loan to facilitating communications with the franchisor. When you’re ready to begin, an abundance of resources is readily available and waiting to help you on your personal journey to franchise ownership.
As these statistics reveal, there’s just no substitute for franchising’s proven business models and owner support level. If entrepreneurship 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 one of our qualified FranNet representatives. Getting started is easy – reach out and talk with one of our franchise experts today! Together, we can find a franchise ownership opportunity that matches up perfectly with your lifestyle and income-oriented goals.