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Interesting Franchise Industry Statistics

Published on September 27, 2021

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Ever wonder about certain franchise industry stats?  For example, which franchise sectors are dominant? Which franchise concepts have grown while others have decreased? How about the range of franchise investments?

These questions are often asked by prospective franchisees and those of us who work in the franchise industry. We should also expect entrepreneurs considering building and launching a new franchise would find these stats useful.

Here are a few highlights from our analysis of the following 10 major franchise sectors.

The leading Franchise Sectors by percentage of unit growth from 2015 to 2020:

  1. Personal Services brands increased by 30%. This includes the homecare, health and fitness and beauty care categories.
  2. QSR brands grew by 17%. Quick Service Restaurants, commonly referred to as Fast Food, is the largest franchise sector and includes hamburger, Pizza and Chicken concepts and other foods.
  3. Real Estate sector grew by 15% which includes agents and brokers.
  4. Commercial and Residential Services brands increased 14%. This sector includes a full range of home services from plumbing to lawn care, cleaning services for office buildings and residential exterior and interior painting.

 

The Franchise Sectors that had 0 or negative unit growth from 2015 to 2020:

The Automotive, Business Services and Full-Service restaurant sectors had no growth for the five-year period.

 

10 Franchise Categories with highest percentage growth and minimum of 500 franchise units from 2015 to 2019:

  1. Property Management: 746
  2. Education, Entertainment, Sports Training: 2772
  3. Pest Control: 1689
  4. Technology: 620
  5. Pharmacy: 7267
  6. Wellness and Nutrition: 748
  7. Security: 7052
  8. Outdoor Property Management: 1295
  9. Grocery Facility: 2680
  10. Beauty and Haircare: 4874

 

The size of franchise systems is dominated by smaller brands. Although the large franchise brands receive most of the attention, it’s the smaller and often less recognized franchises that dominate the industry.

100 units or fewer: 73%

50 units or fewer: 60%

25 units or fewer: 47%

 

Franchise Initial Investment  

We broke down the startup franchise investment by sector for Emerging brands (startups and less than 50 units) from 2015 to 2019 although there were slight increases in the higher investment categories the low investments changed very little. This is reflective of the fact that a low investment franchise is less costly to build and launch and attracts a larger universe of potential franchisees.

 

Franchise initial Investment Distribution

Under $100,000 16%
$100,000 to$250,000 27%
$250,000 50 $500,000 25%
$500,00 to $750,000 13%
$750,000 to $1,000,000 16%
 $1,000,000 to $2,000,000 7%
Over $2,000,000 6%

 

For existing franchisors, entrepreneurs contemplating franchising and existing business or individuals considering investing in a franchise opportunity, it’s important to know how existing franchise sectors and individual franchise categories are performing.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or ed.teixeira@franchisegrade.com.


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