U.S. flag

An official website of the United States government

Skip Header


Nearly 300 Industries Offer Franchise Opportunities

Written by:

Let’s imagine a woman named Mary, a fitness instructor who is thinking about opening an independent fitness and recreational sports center. She researches demographics of several potential locations and identifies a city that could be an ideal spot.

However, she notices an increase of chain fitness centers opening in that area.

These data are important for economic development and growth as well as to help decide if a potential business owner should open a franchise-owned business or an independent business.

Should she drop the idea of an independent business and buy a franchise fitness center with an established brand recognition instead? Are there data that could help her make this important decision?

Good news for Mary, our fictitious entrepreneur: The 2017 Economic Census Franchise Statistics Report publishes information on the 498,234 franchise establishments in the United States in 2017.

These franchises represent 11.4% of all businesses in the industries published and covered by the report. These franchise establishments employed 9.6 million of the 63.3 million workers in these industries.

 

 

The report showed that franchises in industries covered in the report had $1.7 trillion in sales, receipts, or revenue in 2017, out of the $9.9 trillion in sales of these establishments.

It also showed average sales per franchise establishment was $3.5 million, compared to $2.3 million for non-franchise establishments.

So how does Mary’s industry compare?

The 9,757 franchise businesses in the Fitness and Recreational Sports Center industry reported sales of nearly $5.0 billion in 2017, up 171% from $1.8 billion in 2007. It also showed that franchises in this industry employed 102,605 workers in 2017, up 62% from 63,455 in 2007.

Across all franchise businesses, the average sales per employee in a franchise establishment was $180,193 compared to $156,295 for all businesses in the published and covered industries.

For Mary’s industry, the same pattern holds. Sales per employee of franchise fitness establishments was $47,183 vs. $44,304 for all establishments in this industry — another important data point in her decision.

Franchises are More than Just Restaurants

In 2017, there were 144,941 franchise-owned Limited-Service Restaurants, the most franchise establishments of any industry.

This industry experienced the greatest increase in franchise establishments from 2007 to 2017, adding a net 20,042 Limited-Service Restaurants during the decade. It also had the greatest increase in franchise employment during the same period (up 609,508), employing 3,214,717 people in 2017.

Though Limited-Service Restaurant franchises had the largest number of franchise establishments and franchise employment, they were not alone in making up a high share of all businesses in a given industry, including Private Mail Centers and the high share that these franchise businesses make of all businesses in the industry.

These data are important for economic development and growth as well as to help decide if a potential business owner should open a franchise-owned business or an independent business.

 

 

Some highlights from the franchise report:

The Franchise Statistics Report includes data on franchise industries that span 15 of the 18 North American Industry Classification System (NAICS) sectors covered by the Economic Census.

The only ones excluded are Mining, Utilities, and Management of Companies and Enterprises. These businesses are diverse in the types of customers they serve and how they operate.

 

Franchisee-Owned vs. Franchisor-Owned

Not all franchises are franchisee-owned and the share that are vary depending on the industry.

Franchisee-owned businesses are owned and operated by someone other than the owner of the franchise. Franchisor-owned is when the owner of the franchise also operates the business.

For example, 89.2% of franchise establishments in the Outdoor Advertising industry were franchisor-owned in 2017, an increase of 1.6% from 2007.

In contrast, 100% of new car dealers were franchisee-owned in 2017. Broadly speaking, however, most franchise industries in 2017 were franchisee-owned.

 

Digging Deeper Into the Numbers

There are many insights to be gained by taking a deep dive into the Franchise Report numbers. For example, looking at the data in terms of franchisee- and franchisor-owned establishments may provide more clues about the industry and where it may be trending.

The Soft Drink Manufacturing industry grew 16% from 2007 to 2017. However, the total number of franchise establishments increased by 201% during this time.

When we break up the data into franchisee- and franchisor-owned establishments, we see that all this growth occurred within franchisee-owned establishments.

In fact, franchisor-owned soda manufacturing plants seemed to disappear, perhaps indicating that this industry is moving towards a model where 100% of all franchise establishments are franchisee-owned.

 

 

 

Pulling It All Together

When combined with data from other Census programs and with data from other sources, the combined statistics provide invaluable insight.

For entrepreneurs like Mary, they could be the key to deciding whether to open an independent business or a franchise.

 

Bárbara Zamora-Appel is a program analyst at the Census Bureau.

Nidaal Jubran is a supervisory survey statistician in the Census Bureau’s Economic Management Division.

 

Subscribe

Our email newsletter is sent out on the day we publish a story. Get an alert directly in your inbox to read, share and blog about our newest stories.

 

About

America Counts tells the stories behind the numbers in a new inviting way. We feature stories on various topics such as families, housing, employment, business, education, the economy, emergency management, health, population, income and poverty.

Contact our Public Information Office for media inquiries or interviews.

 

Top

Back to Header