Franchising in the U.S. - Statistics & Facts

The franchising industry in the United States includes arrangements where a company licenses the use of their brand, products and processes to a separate business, which then operate under the name of the larger company. This practice is common in a variety of segments across the U.S. economy and encompasses some of the most well-known companies in the world. In 2018, it is estimated that there will be some 759,200 franchise establishments in the United States, outputting some 760 billion U.S. dollars and employing over eight million people. The largest segment of the franchising industry is quick service restaurants, comprising over 250 billion dollars of the industry’s total economic output, followed by business services with around 100 billion dollars. Rounding out the top five are franchises in full service restaurants, real estate, and commercial and residential services.

In terms of revenue, the leading franchise in the United States is McDonalds, who generated over 90 billion U.S. dollars in sales worldwide in 2017. They are followed by other such iconic names as 7-Eleven, with 85 billion dollars in sales, KFC with 25.5 billion, and Burger King with 20 billion. However, the largest franchise in terms of the number of establishments is Subway, with almost 26,000 as of 2017. This compares to around 14,000 McDonalds establishments, and just over 7,000 each for Pizza Hut and Burger King. The largest non-retail franchises in terms of revenue are the real estate company RE/MAX, and the international hotel chains Marriot, Hilton and Hyatt.

The costs of opening a franchise in the United States are substantial. The initial investment for a McDonalds franchise in 2017 stood at around 2.2 million dollars, of which the majority (around 1.5 million) is for signs, seating, equipment and décor. Similarly, costs for a KFC franchise at that time were around 2.7 million dollars, and just over three million dollars for Burger King. Establishing a Subway franchise however is much cheaper than the other major fast food chains, at around 233,000 dollars. Conversely, and not surprisingly, costs for a Marriot Hotel franchise are significantly higher, totaling just under 97 billion dollars.

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