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Important Franchise Industry Statistics

by Ed Teixeira

Following is a summary of franchise statistics compiled by FranchiseGrade.com

FranchiseGrade is a preeminent franchise research firm and the only one that surveys a cross section of current franchisees. Their industry statistics are based upon a cross section of over 800 FDD's. In case you missed these, here are some important franchise industry statistics gathered by Franchisegrade.com from their database of FDD's and surveys of over 12,000 franhisees.

Franchise Industry Statistics:

  • 78% of franchise companies had less than 5% of their total franchise locations close over a one year period
  • 63% of franchisors disclose Item 19 financial performance representations
  • 58% of franchisors have less than 5% Franchisee Turnover Rate in the last 3 years
  • 57% of franchisors provide 80 hours or more of training
  • 52% of franchisors require franchisees to work in outlet
  • 46% of franchisors offer financing
  • 46% of franchisors have 100 units or more
  • 40% of franchisors have zero lawsuits
  • 32% of franchisors have operated for 15 years or more

These statistics indicate that a majority of franchisors are stable with low franchisee turnover.

Franchisee Survey Results:

  • 81% of Franchisees were profitable last year
  • 79% of Franchisees work more than 40 hours per week
  • 75% of Franchisees are proud to be Franchisees in their system
  • 64% of Franchisees believe the advertising support given by the franchisor is ineffective
  • 57% of Franchisees felt their initial training was helpful
  • 40% of Franchisees would not invest in their current franchise given what they know now
  • 37% of Franchisees believe their initial Franchise Fee paid was unfair
  • 17% of Franchisees are expecting to open up at least one additional location within the next 3 years

These survey results may appear contradictory. For example, although 75% of franchisees are proud to be franchisees in their system 40% would not invest in their current franchise. As more franchisees are surveyed and the survey questions adjusted, it may be possible to learn more about the difference in responses.

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2015 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating Officer, FranchiseGrade.com. He is a former franchise executive and franchisee. He can be contacted at 631-246-5782 or at  franchiseknowhow@gmail.com



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