The franchise business model plays an important role within the U.S. economy. Prior to the pandemic, in 2019, the economic output of franchise establishments in the United States was about $787.5 billion and represented 3% of the country’s GDP. Most people immediately associate franchising with fast food restaurants. However, quick service restaurants are just a fraction of the entire sector, making up only a fourth of all franchised establishments, less than half of the workers, and just over a third of the economic output.
Beyond their economic contribution, we find that franchises offer pay, benefits, and training on par with comparable non-franchise small businesses. In addition, 32% of franchisees report they would not own a business if they were not franchisees. Lastly, we highlight how franchisees are embedded in their local communities through their local supply chains and charitable giving.
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