Industry Facts & Questions

Quick Statistics

There are approximately 1,500 different Franchisors in the United States.
More than 750,000 businesses are franchised in the United States.
The franchising industry and businesses employ over 18,000,000 in the United States.
The franchise industry accounts for 40% of all retail sales in the United States.
A new franchise business opens approximately every 8 minutes, every business day.
Approximately 1 out of every 12 businesses in the United States is a franchise business.
Average of royalties paid by Franchisees range from 3% to 6% of monthly gross sales.
Most franchise companies have fewer than 100 units.
The average length of a typical franchise contract is 10 years.
The top franchise industry is fast foods.

Top 10 Fastest Growing Franchises for 2011

As reported by Entrepreneur Magazine, the top 10 fastest growing franchises for 2011 are as follows:

Stratus Building Solutions
Jan – Pro Franchising International, Inc.
Subway
CleanNet USA Inc.
Anago Cleaning Systems
Pizza Hut Inc.
Liberty Tax Service
Vanguard Cleaning Systems
Bonus Building Care
System4

2011 Top 20 Franchises in Social Media (Franchises on Facebook)

(Reprinted from www.franchisehelp.com, as of 4/1/2011)

FB Rank	Franchise Name	FB Likes / FanCount
1	McDonald’s	7,660,043
2	Buffalo Wild Wings	4,440,946
3	Subway	4,003,673
4	Pizza Hut	3,169,338
5	Dunkin’ Donuts	3,163,866
6	KFC – Kentucky Fried Chicken	2,941,372
7	Dairy Queen	2,821,189
8	Ben & Jerry’s	2,522,661
9	Baskin-Robbins	2,242,024
10	Papa John’s Pizza	1,576,022
11	Cold Stone Creamery	1,251,525
12	Carl’s Jr.	661,973
13	7-Eleven	659,617
14	Jimmy John’s	545,970
15	Rita’s Italian Ice	456,400
16	Hardee’s	437,230
17	Cinnabon	432,575
18	Yogen Fruz	374,320
19	Arby’s	258,878
20	Auntie Anne’s	252,588

Federal Trade Commission FAQs

1. What presale disclosure documents must be given to me?
The Federal Trade Commissions’ Rule on franchising requires franchisors and business opportunity sellers to provide to prospective purchasers a Disclosure Document. These are not kept on file by the Federal Trade Commission. However, federal law as well as state franchise laws in 16 states and state business opportunity laws in 26 states require registration with a designated state agency. As a result, the Disclosure Documents may be obtainable from those particular state agencies. They are also obtainable with respect to all 50 states by private companies. For a reference of one of these companies, contact attorney David L. Steinberg.

2. How can I find out if a franchise company has complaints against it from other Franchisees?
This is a good question, but unfortunately there is no federal or state agency that will necessarily keep a “list of complaints”. A prospective franchisee can contact the Federal Trade Commission in Washington, D.C., or the State Attorney General Office in the state in which the prospective franchisee desires to operate. If there has been litigation or arbitration filed against a franchisor, it must be listed in Item #3 of the Franchise Disclosure Document. Under the new amendment to the Federal Trade Commission Rule, effective July, 2008, franchisors must now disclose franchisor initiated lawsuits against franchisees during the last fiscal year with respect to any issue involving the franchise relationship. In addition, there is no substitute for checking the track record of a franchisor business opportunity seller by personally talking to at least ten prior purchasers. This is why the Federal Trade Commission requires companies to give consumers a list of the names, addresses and telephone numbers of all franchisees. Prospective franchisees should interview prior purchasers about their experiences and ask them to verify that they are not being paid to provide a favorable review.

3. How does a prospective Franchisee know what is to be included in the Franchise Disclosure Document?
The Federal Trade Commission rule on franchising, as published in the Code of Federal Regulations, specifically states what must be disclosed and provided to prospective franchisees in the Franchise Disclosure Document.

Sources of Franchise Information