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 2020, it is estimated that there will be some 753,700 franchise establishments in the United States, outputting some 670 billion U.S. dollars and employing 7.5 million people. The largest segment of the franchising industry is quick service restaurants, comprising over 241 billion dollars of the industry’s total economic output, followed by business services with around 121 billion dollars. Rounding out the top five are franchises in full service restaurants, real estate, and commercial and residential services.

Leading franchising brands

In terms of revenue, the leading franchise in the United States is McDonalds, who generated over 93 billion U.S. dollars in sales worldwide in 2020. They are followed by other such iconic names as 7-Eleven, with 91 billion dollars in sales, KFC with 26.24 billion, and Burger King with 26 billion. However, the largest franchise in terms of the number of establishments is Subway, with 23,000. 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.

Expect high costs for opening a franchise

The costs of opening a franchise in the United States are substantial. The initial investment for a McDonalds franchise in 2020 stood at around 2.3 million dollars, of which the majority is for signs, seating, equipment and décor. Similarly, costs for a KFC franchise at that time were around 2.8 million dollars, and 3.4 million dollars for Burger King. Not surprisingly, costs for a Marriot Hotel franchise are significantly higher, totaling over 117 million dollars.

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