Franchise Business Financing FAQ

How many franchises operate in the U.S.?
It is estimated that up to 6,000 franchises operate in the U.S. These franchises account for 750,000 franchised businesses and nearly 50% of all retail sales in the United States. In fact, 1 in every 12 businesses is a franchise. Over 300 franchises are sold every week, which works out to about one every 8 minutes.

What is the average initial investment needed to purchase a franchise?
Excluding real estate, the initial investment for approximately 8 out of 10 franchises is less than $250,000.
What can a franchise owner expect to make each year from the franchise?
The median gross annual income of franchisees was in the $75,000 to $124,000 before taxes in 2000. Over 30% of the franchisees earned over $150,000 per year.

How many different types of franchises are there?
The selection of franchises is quite extensive as 75 different industries use franchising to distribute goods and services to consumers.

What is the survival rate for a franchise?

• A study conducted by the United States Chamber of Commerce in 1999 found that 86% of franchises opened within the last five years were still under the same ownership and 97% of them were still open for business.
• According to a 1971 to 1997 U.S. Department of Commerce study less than 5% of franchise businesses were closed each year.