How Many Franchises Are There in the United States?

Franchising has become a strong and widespread model for entrepreneurs to do business. Over the years, the industry has continued to grow. But how many franchises are there? The most recent data from Statista shows that the country boasted an impressive 790,500 franchise establishments in 2022. 

Here’s a look into the history and dynamics of franchising in the United States, as well as the economic impact it has on the nation.

Defining Franchises

The industry experienced significant growth after World War II when there was a heightened demand for new products and services. Franchising in the United States began in 1851 when Isaac Singer sold the right to sell his sewing machines to salespeople. 

Today, a franchise company or organization serves as an umbrella term for a parent company that licenses its brand name and business model to individuals in exchange for fees and royalties. The two primary entities involved are the franchisor, responsible for developing the licensed business model, and the franchisee, who invests in and operates the business while paying agreed-upon fees to the franchisor. Franchise companies create successful business models, market them with a recognizable brand and license them to franchisees for expansion into different territories. 

Franchising’s Impact on the Economy and Employment

In 2021, the economic output of franchise establishments in the United States reached a staggering $790 billion, according to Statista. Notably, this economic impact is not just confined to financial figures but also extends employment opportunities to over 8 million people who work for franchise businesses. As franchise establishments continue to grow, job opportunities follow suit, creating a ripple effect that positively influences the overall employment landscape.

The Franchise Industry Landscape

While the fast-food sector is widely recognized as a stronghold within the franchise industry, franchises operate in virtually every sector imaginable. The most commonly franchised industry categories include service-related fields, such as home repair and remodeling, carpet cleaning, household furnishings, maintenance, and cleaning services, according to the International Franchise Association. Additionally, franchises are commonly seen in business support services for accounting, mail processing, advertising services, package shipping, personnel services and printing services.

Other frequently franchised industries encompass automotive repairs and services, environmental services, hair salons, health aids and services, computer and phone repair, clothing stores, and children’s services. 

From its historical roots in the 19th century to its diverse presence across various sectors today, franchising continues to drive economic growth and provide substantial employment opportunities across the nation.

To learn more, check out these related articles: 

• A Beginner's Guide to Franchising: How the Model Works
• Franchising vs. Licensing: What Is the Difference?
• Chapter 1: Introduction to Franchising: What Every Entrepreneur Should Know