From its trillion-dollar GDP contribution in the U.S. to its explosive double-digit growth across emerging markets, the franchising industry isn't just a significant economic engine—it's a global powerhouse creating millions of jobs and opportunities.
Key Takeaways
- The U.S. franchising industry generated $946.2 billion in economic output in 2023, representing 3.2% of the total U.S. GDP
- Global franchising market size reached $3.2 trillion in 2022 and is projected to grow at a CAGR of 5.8% from 2023 to 2030
- Number of franchise establishments in the U.S. increased by 2.1% to 814,363 in 2023 from 797,000 in 2022
- U.S. franchise royalties averaged 5.8% of sales in 2023 surveys
- Average U.S. franchise unit revenue was $1.2 million in 2022 for top performers
- Franchisee satisfaction score averaged 4.1 out of 5 in 2023 FBR survey of 35,000 owners
- U.S. franchising employed 8.9 million people directly in 2023, 7.5% of private workforce
- Franchises paid $105 billion in wages in U.S. 2023, average hourly $18.50
- U.S. franchise industry supported 2.1 million indirect jobs in supply chain 2023
- U.S. Food sector franchises employed 4.1 million in 2023, 46% of total
- Business services franchises comprised 24% of U.S. units, 192,000 locations in 2023
- Quick-service restaurants held 25% of U.S. franchise sales at $225 billion in 2023
- AI and tech integration in 35% of U.S. franchise brands by 2028 projections
- Sustainability initiatives in 62% of franchises by 2025, zero-waste goals
- Multi-unit ownership to reach 90% of U.S. franchises by 2027
The franchising industry is a massive and steadily growing global economic force.
Economic Contributions
- U.S. franchising employed 8.9 million people directly in 2023, 7.5% of private workforce
- Franchises paid $105 billion in wages in U.S. 2023, average hourly $18.50
- U.S. franchise industry supported 2.1 million indirect jobs in supply chain 2023
- Franchising contributed $188 billion in tax revenues to U.S. federal/state/local in 2023
- Global franchising supports 20 million jobs worldwide as of 2023 estimates
- U.S. franchises generated $825 billion in output from goods/services in 2023
- Franchise sector GDP multiplier effect 2.3x in U.S. economy 2023
- 40% of U.S. franchised units are minority-owned, adding $300 billion economic value 2023
- Franchises accounted for 12% of U.S. retail sales in 2023, totaling $450 billion
- U.S. franchise payroll taxes contributed $25 billion in 2023
- International franchising adds $500 billion to emerging markets GDP annually
- U.S. franchise industry saved $15 billion in unemployment benefits in 2023
- Franchised businesses represent 3% of U.S. establishments but 10% of private employment
- $1 invested in franchising yields $8.75 economic return in U.S. 2023
- Franchises exported $50 billion in services internationally from U.S. in 2023
- U.S. franchise sector grew GDP by 0.5 percentage points in 2023 recovery
- 760,000 U.S. franchised establishments paid $90 billion in local property taxes 2023
- Franchise industry resilience maintained 95% employment levels post-recession 2023
- Franchising supports 5% of U.S. small business GDP at $200 billion
- Global franchise supply chain spend $1.2 trillion yearly, 2023 data
Economic Contributions Interpretation
The franchising industry isn't just flipping burgers or pouring coffee; it's the economic equivalent of a turbocharged small business engine, employing nearly 9 million Americans directly, contributing nearly a trillion dollars in output, and proving that a system built on uniform branding is remarkably diverse, resilient, and indispensable to local and global prosperity.
Franchise Performance
- U.S. franchise royalties averaged 5.8% of sales in 2023 surveys
- Average U.S. franchise unit revenue was $1.2 million in 2022 for top performers
- Franchisee satisfaction score averaged 4.1 out of 5 in 2023 FBR survey of 35,000 owners
- U.S. multi-unit franchisees operated 85% of franchise units in 2023, average 12 units per owner
- Average franchise startup costs ranged $250,000-$1.5 million in 2023, median $450,000
- Top 200 U.S. franchises averaged 8.5% same-store sales growth in 2022
- Franchise validation calls averaged 4.2 hours per prospect, leading to 65% close rate in 2023
- U.S. franchise EBITDA margins averaged 18.2% for mature units in 2023
- Female franchisees represented 38% of U.S. owners in 2023, up from 28% in 2018
- Average time to breakeven for franchises was 18 months in 2023 surveys
- U.S. franchise renewal rate was 92% in 2023, indicating strong retention
- Top franchise brands had 95% franchisee recommendation rate in 2023 Net Promoter Score
- Average annual franchisee earnings $125,000 after expenses in 2023 for single units
- U.S. franchise litigation cases dropped 15% to 450 in 2023
- Multi-brand franchisees grew 12% to 45,000 owners in 2023 U.S.
- Franchise training completion rates 98% in top systems 2023
- Average franchise fee $38,000 in 2023, with 70% offering financing assistance
- U.S. franchise default rate 2.1% in 2023, lowest in decade
- Veteran franchisees 14% of U.S. owners in 2023, up 5% since 2019
- Digital marketing ROI for franchises averaged 4:1 in 2023 campaigns
Franchise Performance Interpretation
The franchising industry reveals a surprisingly healthy ecosystem where, despite the high-stakes entry fee, franchisees are generally thriving—evidenced by strong earnings, soaring satisfaction, and near-universal renewals—suggesting the real secret sauce isn't just the brand's formula, but a model that actually works for those who can afford the buy-in.
Future Trends
- AI and tech integration in 35% of U.S. franchise brands by 2028 projections
- Sustainability initiatives in 62% of franchises by 2025, zero-waste goals
- Multi-unit ownership to reach 90% of U.S. franchises by 2027
- Online sales for franchises projected 25% of total revenue by 2027
- Emerging markets franchising growth 12% CAGR to $1 trillion by 2030
- Female ownership to 45% of U.S. franchises by 2028
- Ghost kitchens/franchise delivery models 20% of food units by 2026
- Veteran-owned franchises 20% by 2030 with incentives
- ESG reporting mandatory for 50% top franchises by 2027
- Mobile franchising units to double to 50,000 U.S. by 2028
Future Trends Interpretation
In the franchise world of tomorrow, the coffee might be ordered by an AI, delivered from a ghost kitchen by a veteran entrepreneur using an electric truck, and the cup itself will proudly boast of its journey to a zero-waste bin, all while the woman who owns the three locations it came from checks her ESG report on her phone.
Industry Demographics
- U.S. Food sector franchises employed 4.1 million in 2023, 46% of total
- Business services franchises comprised 24% of U.S. units, 192,000 locations in 2023
- Quick-service restaurants held 25% of U.S. franchise sales at $225 billion in 2023
- Health & fitness franchises grew 7.2% in units to 35,000 U.S. locations 2023
- Retail franchises represented 11% of U.S. establishments, 90,000 units 2023
- Education/childcare franchises 8% of units, 65,000 locations employing 800,000 in 2023
- Automotive services 6% of franchise output, $75 billion sales 2023 U.S.
- Lodging franchises 4% of total, 45,000 hotels worldwide under franchise 2023
- Personal services (beauty, pet) 12% growth, 100,000 U.S. units 2023
- Real estate franchises 3% of U.S. units, $40 billion revenue 2023
- Senior care franchises expanded 9% to 28,000 units U.S. 2023
- Full-service restaurants 15% of sales, $135 billion 2023 U.S.
- Cleaning/maintenance services 18% of units, 145,000 locations 2023
- Travel agencies under franchise 2,500 brands globally 2023
- E-commerce enabled franchises 5% of new units, hybrid models 2023
- Construction/home improvement 7% units, 55,000 U.S. 2023
- Fitness/wellness post-COVID 22% unit growth since 2020 to 2023
- Pet services franchises 11,000 units, $8 billion sales U.S. 2023
- Technology/IT services 4% emerging, 30,000 units 2023
- Median franchise brand age 18 years in U.S. 2023
Industry Demographics Interpretation
America runs on franchise fuel, serving up a diet of burgers, business plans, and burpees, where even our vices and virtues—from quick-service indulgence to senior care and fitness—are efficiently delivered through a well-branded, 18-year-old median playbook.
Size and Growth
- The U.S. franchising industry generated $946.2 billion in economic output in 2023, representing 3.2% of the total U.S. GDP
- Global franchising market size reached $3.2 trillion in 2022 and is projected to grow at a CAGR of 5.8% from 2023 to 2030
- Number of franchise establishments in the U.S. increased by 2.1% to 814,363 in 2023 from 797,000 in 2022
- Franchising sector in Europe grew by 4.5% in turnover to €1.8 trillion in 2022
- U.S. franchise industry sales reached $906.4 billion in 2022, up 4.6% from the previous year
- Indian franchising market valued at $18.5 billion in 2023, expected to hit $50 billion by 2028 at 22% CAGR
- Canadian franchise sector contributed CAD 120 billion to GDP in 2022, growing 3.8% annually
- Australia-New Zealand franchising turnover hit AUD 171 billion in 2022, with 1,245 franchise systems
- Brazil's franchising market expanded 12.4% in billings to BRL 210.7 billion in 2022
- U.K. franchise sector generated £17 billion in turnover in 2022, up 5% from 2021
- China franchising revenue surpassed CNY 2.5 trillion in 2022, with over 5,000 brands
- Mexico franchise market grew 8.7% to MXN 450 billion in 2022
- South Africa franchising contributed ZAR 995 billion to economy in 2022, 15% of GDP
- U.S. franchising projected to add $1 trillion in output by 2025
- Middle East franchising market valued at $45 billion in 2023, CAGR 7.2% to 2028
- Southeast Asia franchise growth at 9.1% CAGR, market size $120 billion by 2027
- Russia franchising turnover increased 15% to RUB 2.2 trillion in 2022 despite challenges
- Turkey franchise sector billings rose 18% to TRY 1.1 trillion in 2022
- U.S. quick-service restaurant franchising grew 3.2% in units to 215,000 in 2023
- Global franchise investments reached $250 billion in 2022
- U.S. franchised businesses numbered 805,000 in 2023, up from 739,000 in 2019
- Franchise sector recovery post-COVID showed 6.8% growth in U.S. sales 2021-2023
- Latin America franchising market at $150 billion in 2023, 10% CAGR projected
- Japan franchise turnover ¥12.5 trillion in 2022, 4,200 systems
- U.S. non-traditional franchising locations grew 5% to 120,000 in 2023
- Africa franchise market emerging at $10 billion, 12% growth expected
- U.S. franchise closings dropped to 4.2% in 2023 from 7.1% in 2020
- International master franchise agreements signed 1,200 in 2022 globally
Size and Growth Interpretation
From vast corporate giants to your neighborhood shop, the global franchise machine is proof that while you can't be in two places at once, your business model absolutely can.
Sources & References
- Reference 1FRANCHISEfranchise.orgVisit source
- Reference 2GRANDVIEWRESEARCHgrandviewresearch.comVisit source
- Reference 3FRANCHISEEUROPEfranchiseeurope.comVisit source
- Reference 4STATISTAstatista.comVisit source
- Reference 5FRANCHISEINDIAfranchiseindia.comVisit source
- Reference 6FRANCHISECANADAfranchisecanada.comVisit source
- Reference 7FRANCHISEfranchise.org.auVisit source
- Reference 8ABFabf.com.brVisit source
- Reference 9BFAbfa.org.ukVisit source
- Reference 10CHINFRANCHISEchinfranchise.orgVisit source
- Reference 11AMFamf.org.mxVisit source
- Reference 12FASAfasa.co.zaVisit source
- Reference 13FRANCHISEMIDDLEEASTfranchisemiddleeast.comVisit source
- Reference 14ASIAFRANCHISEEXPOasiafranchiseexpo.comVisit source
- Reference 15FRANCHISINGfranchising.ruVisit source
- Reference 16TUDOFtudof.org.trVisit source
- Reference 17FRANCHISETIMESfranchisetimes.comVisit source
- Reference 18FRANCHISEASIAfranchiseasia.comVisit source
- Reference 19SBAsba.govVisit source
- Reference 20FRANCHISEBUSINESSREVIEWfranchisebusinessreview.comVisit source
- Reference 21LATINFRANCHISEEXPOlatinfranchiseexpo.comVisit source
- Reference 22JFA-FCjfa-fc.or.jpVisit source
- Reference 23FRANCHISEUPDATEfranchiseupdate.comVisit source
- Reference 24AFRICANFRANCHISEafricanfranchise.comVisit source
- Reference 25FRANDATAfrandata.comVisit source
- Reference 26IFCifc.orgVisit source
- Reference 27FRANCHISETIMESfranchisetimesVisit source
- Reference 28ENTREPRENEURentrepreneur.comVisit source
- Reference 29WORLDBANKworldbank.orgVisit source
- Reference 30BLSbls.govVisit source
- Reference 31BEAbea.govVisit source
- Reference 32FRANCHISEHOSPITALITYfranchisehospitality.comVisit source
- Reference 33NRNnrn.comVisit source
- Reference 34FRANCHISETRAVELfranchisetravel.comVisit source
- Reference 35IBISWORLDibisworld.comVisit source