Today I wanted to share a few franchise facts and industry stats with you.
- There are an estimated 1,500 different franchisors (franchise business companies) operating in the U.S.
- There are believed to be more than 750,000 franchise businesses in the U.S.
- The franchising industry and businesses employs over 18 million people in the U.S.
- In 2004, it is estimated that franchise businesses were responsible for over 1.5 trillion in economic output.
- The franchise industry accounts for 40% of all retail sales in the US
- A new franchise business opens every 8 minutes of every business day
- Approximately one out of every 12 businesses in the U.S. is a franchise business
- Franchise fact: More than 75 different industries use franchising as a means to distribute goods and services
- The average initial franchise investment is $250,000- excluding real estate.
- The average royalty fees paid by franchisees range from 3% to 6% of monthly gross sales.
- Most franchise companies have fewer than 100 units
- The average length of a franchise contract is 10 years
- Top franchise industry- Fast Food
- Top franchise company- McDonalds
It's no doubt that franchiseing works, but the question really is.... Is a franchise business right for you.
Here are some reasons You might want to purchase a Franchise Business?
Top Reasons To Buy A Franchise Business: Below you will find a list of some the top reasons why the franchise business model is considered to be the best and least risky way to start and own a successful small business in today's market.
Minimization of Risk: The #1 reason you should consider the franchise business model is to minimize your risk of failure. Many studies have concluded that the failure rate of new start businesses is over 90% within 5 years, compared to a success rate of 90% of franchise businesses that are still operating after 5 years.
Established Business Product or Service: The franchising business model generally offers a proven product or service that has been tested, validated, and successfully sold in the market place.
Proven Business Model: Franchise businesses can offer and transfer a proven and refined business model. This would include would include operating and management systems developed by the franchise company, as well as uniform operational standards and procedures.
Brand Recognition: Leveraging the power of an established and successful franchise system can offer new franchise owners instant brand name recognition in a crowded and often very competitive consumer market place.
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