Franchises Continue to Succeed

Success/Failure?

Statistical Comparison of Franchises to Start Up's. I thought this might be useful information to anyone considering a Franchise Business:

Franchise Facts & Statistics:

Nearly 86% of all franchises opened in 60 industries during the past 5 years are still under the same ownership.

750,000 franchised businesses in the U.S. generate over a $1 trillion each year.

In 2000, the median gross annual income, before taxes, of franchisees was in the $75,000 to $124,000 range, with over 30% of franchisees earning over $150,000 per year.

A 1999 study by the United States Chamber of Commerce 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.

A US department of commerce study conducted from 1971 to 1997 showed that during that time less than 5% of franchise businesses were closed each year.

Compare that to a US Small Business Administration study conducted from 1978 to 1998, which found that 62% of non franchised businesses closed within the first 6 years of their existence due to failure, bankruptcy, etc.

U.S. Department of Commerce Seven Year study of Franchise vs. Independent Start-Up Success Rate:

According to the U.S. Department of Commerce, franchise businesses are exponentially more likely to succeed than individual new start-ups, particularly if you look at the figures over a five or seven year period. According to Department of Commerce figures, after seven years 91% of new franchises are still in business, as compared to only 20% of individual new start-up businesses.