{"id":4647,"date":"2025-02-13T13:39:37","date_gmt":"2025-02-13T18:39:37","guid":{"rendered":"https:\/\/www.northone.com\/blog\/?p=4647"},"modified":"2025-02-13T13:39:37","modified_gmt":"2025-02-13T18:39:37","slug":"franchise-statistics","status":"publish","type":"post","link":"https:\/\/www.northone.com\/blog\/start-a-business\/franchise-statistics","title":{"rendered":"15 Essential Franchise Statistics to Know in 2025"},"content":{"rendered":"\n

Starting a business<\/a> like a franchise can be an exciting new venture\u2014owners get the benefit of brand recognition and business leadership with far less risk. But how much does it cost to own your own franchise? How much do franchises make each year? Which franchises are doing the best? Here are some franchise statistics that offer an overview of the industry, from risks and rewards to demographics and future trends.<\/p>\n\n\n\n

<\/span>1. How many franchises are there in America?<\/strong><\/span><\/h2>\n\n\n\n

In 2023\u2014the last year for which there is data available\u2014there were 806,270 franchises in the United States alone. That number was predicted to go up to over 821,000 in 2024. 2013 had the lowest number of franchise businesses since 2007, with just 697,943 franchises. <\/p>\n\n\n\n

<\/span>2. How many franchise owners and employees are in America?<\/strong><\/span><\/h2>\n\n\n\n

There are over 712,000 franchise owners in the United States. About 8.66 million employees work at U.S. franchises. For comparison\u2019s sake, there were 161,141,000 employed people in the United States as of November 2024, making franchise employees about five percent of the working population.<\/p>\n\n\n\n

<\/span>3. What are some basic franchise owner demographics?<\/strong><\/span><\/h2>\n\n\n\n

69 percent of franchise owners are men, and the most common ethnicity is White (67.2 percent), followed by Hispanic\/Latino (15.4 percent), Asian (6.4 percent) and Black (6.2). 10 percent of all franchise owners identify as LGBTQ. The average age of a franchise owner is 44.<\/p>\n\n\n\n

The most popular owner industries are hospitality (19 percent), public companies (14 percent), professional industries (13 percent), manufacturing (11 percent) and retail (nine percent).<\/p>\n\n\n\n

<\/span>4. How much do franchises make each year?<\/strong><\/span><\/h2>\n\n\n\n

Economists predicted that the output of franchised businesses in 2024 would increase by 4.1 percent in 2024, bringing the total up to $893.9 billion. Franchises made $858.5 billion in 2023. <\/p>\n\n\n\n

<\/span>5. How has the franchise industry recovered after the COVID-19 pandemic?<\/strong><\/span><\/h2>\n\n\n\n

The franchise industry brought in $677 billion in 2020, down from $794 billion in 2019. Fortunately, franchise growth and income has recovered, and is predicted to keep growing throughout 2025.<\/p>\n\n\n\n

<\/span>6. What\u2019s the most popular type of franchise?<\/strong><\/span><\/h2>\n\n\n\n

Food-related franchises are estimated to make up at least 30 percent of franchises in the United States. Some estimates bring that number up to 37 percent. The food industry is also responsible for a staggering 60 percent of direct franchise employment. Fast food franchises\u2014from McDonald\u2019s to Chick-Fil-A\u2014make up 25 percent of all food-related franchises.<\/p>\n\n\n\n

<\/span>7. How long is a typical franchise contract?<\/strong><\/span><\/h2>\n\n\n\n

The average franchise contract ranges from 10-20 years\u2014and royalties average from five to six percent. 24 percent of franchise owners stay at the franchise for one to two years, and 21 percent stay for three to seven years.<\/p>\n\n\n\n

<\/span>8. How many franchise brands are available?<\/strong><\/span><\/h2>\n\n\n\n

There are over 3,000 unique franchise brands available in the United States. <\/p>\n\n\n\n

<\/span>9. What\u2019s the largest franchise in the U.S.?<\/strong><\/span><\/h2>\n\n\n\n

Unsurprisingly, when it comes to revenue, McDonald\u2019s is the biggest franchise in the U.S. and the world\u2014and 93 percent of its stores are franchises. They raked in over $113 billion in 2023 and have over 13,300 restaurants in the United States alone. <\/p>\n\n\n\n

When it comes to stores, however, Subway takes the lead. Unfortunately, that number has been falling each year since 2015.<\/p>\n\n\n\n

<\/span>10. How much does it cost to start a fast food franchise?<\/strong><\/span><\/h2>\n\n\n\n

If you want to start a fast food franchise, you had better have some serious cash. The initial McDonald\u2019s investment ranges from $1,366,000 to $2,450,000. The franchise fee is currently $45,000, and owners are expected to have at least $500,000 in liquid assets. Plus, franchisees are expected to pay four percent on their gross sales, plus another four percent (or more) on brand fund fees. A significant chunk of this investment goes to signs, seating, equipment and d\u00e9cor.<\/p>\n\n\n\n

Other fast food restaurants require similar investments: $3.2 million for KGC and $4.2 million for Burger King. Chick-Fil-A is firmly on the lower end, however: the franchise fee is just $10,000. Startup costs range from $295,412 to $2,431,608.<\/p>\n\n\n\n

<\/span>11. What\u2019s the riskiest franchise to own?<\/strong><\/span><\/h2>\n\n\n\n

Smoothie King has one of the highest loan failure rates: a staggering 28 percent of their SBA-backed franchise loans go into default.<\/p>\n\n\n\n

<\/span>12. What percentage of franchisers are using AI in 2025?<\/strong><\/span><\/h2>\n\n\n\n

AI is all the rage now, offering solutions for industries ranging from human resources to healthcare. Experts predict that about 40 percent of franchisors will adopt AI-driven technology in 2025, primarily to optimize their customer interactions, automate finances<\/a>, and streamline internal processes. Ideally, the new technology can help personalize the customer experience, offer business and customer insights and overall increase efficiency.<\/p>\n\n\n\n

<\/span>13. What are the franchise trends for 2025?<\/strong><\/span><\/h2>\n\n\n\n

The franchising industry is expected to continue to grow in 2025. One of the biggest trends to watch for is sustainability and social responsibility: over 60 percent of consumers prefer to buy from brands that have ethical and sustainable environmental practices. If you\u2019re considering investing in a franchise, look for a company that emphasizes green initiatives\u2014and ideally, the customers will follow.<\/p>\n\n\n\n

<\/span>14. What were the top-ranked franchises in 2024?<\/strong><\/span><\/h2>\n\n\n\n

According to Entrepreneur, the top five franchises in 2024 were Taco Bell, Jersey Mike\u2019s Subs, Popeyes Louisiana Kitchen, the UPS Store and Ace Hardware. <\/p>\n\n\n\n

Entrepreneur ranks franchises by evaluating their costs and fees, available support, size, growth and their overall brand strength. <\/p>\n\n\n\n

Unsurprisingly, 24 of the top 50 franchises were food-related, demonstrating that industry\u2019s dominance in the franchise sphere.<\/p>\n\n\n\n

<\/span>15. What are the biggest challenges in operating a franchise?<\/strong><\/span><\/h2>\n\n\n\n

According to the U.S. Government Accountability Office, the top reported franchise challenges are owners lacking control over business operations, owners failing to read important disclosures and that franchise concerns may actually be underreported\u2014that is, franchisees may be afraid of speaking out against their brand owners. If you want to be a franchise owner, be sure to do plenty of research, including speaking to other brand franchisees, past and present.<\/p>\n\n\n\n

<\/span>Power Your Franchise with North One<\/strong><\/span><\/h2>\n\n\n\n

Now that you know the top franchise statistics for 2025, you should have a basic understanding of the industry\u2014from startup investments to potential challenges. When you\u2019re ready to invest in your own franchise, choose North One<\/a> as your banking partner. Our business checking services are designed with small businesses, startups, entrepreneurs and franchisees in mind. From the intuitive digital platform to integrations and financial management tools, North One has everything you need to power your franchise finances.<\/p>\n","protected":false},"excerpt":{"rendered":"

Starting a business like a franchise can be an exciting new venture\u2014owners get the benefit of brand recognition and business leadership with far less risk. 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