Franchising plays a vital role in the U.S. economy — yet its full impact is often misunderstood. While franchise brands are widely recognized, the individuals behind them are local business owners who live, work, and invest in the communities they serve.

To better understand the economic and social contributions of franchising, the International Franchise Association released a new report, The Value of Franchising, prepared by Oxford Economics. Drawing on a survey of nearly 3,000 franchisees and a rigorous econometric analysis comparing franchised and non-franchised businesses, the report highlights how franchising uniquely combines trusted brands with local ownership to create jobs, expand access to entrepreneurship, and strengthen communities across the country.

Franchising Is a Cornerstone of the U.S. Economy

The scale of franchising’s economic contribution is significant. Today, there are more than 830,000 franchise establishments operating nationwide, supporting 8.8 million direct jobs and generating approximately $550 billion in U.S. GDP. These businesses span dozens of industries, from home services and health care to retail, hospitality, and education — with fast food representing less than one-quarter of all franchise establishments.

Importantly, franchising is fundamentally a small business model. More than 80 percent of franchisees own a single location, and 94 percent of franchised establishments employ fewer than 50 people. Nearly half of all franchised brands operate 25 units or fewer, underscoring that franchising is not dominated by large corporations but powered by local entrepreneurs.

Stronger Jobs and More Stable Career Pathways

The report also finds that franchised businesses provide meaningful advantages for employees. Compared to non-franchised businesses, franchise employees experience faster wage growth, greater access to benefits, and stronger job stability. Part-time franchise employees are 20 percent more likely to transition into full-time roles, and employees are 3–7 percent more likely to receive benefits than those working for non-franchised businesses.

Retention is another differentiator. After one year, non-franchise employees are nearly 50 percent more likely to leave their jobs than franchise employees. Across comparable sectors, franchise employment grew 10 percent faster than non-franchise employment between 2021 and 2024, reinforcing franchising’s role in workforce stability and growth.

A Proven Path to Business Ownership

Franchising also lowers traditional barriers to entrepreneurship. Sixty-four percent of franchisees are first-time business owners, and nearly one-third say they would not own a business at all without the franchise model. By providing brand recognition, training, operational systems, and peer networks, franchising enables entrepreneurs to start and grow businesses with greater confidence and support.

The model has particular impact for underrepresented groups. Franchised businesses are more likely to be minority-owned than non-franchised businesses, and the economic outcomes are substantial. Black-owned franchise businesses earn more than twice the revenue of comparable Black-owned non-franchise firms, while veteran-owned franchises generate nearly three times the revenue of veteran-owned independent businesses.

Local Ownership That Strengthens Communities

At its core, franchising is designed to keep ownership local. Eighty-five percent of franchisees live and work in the communities they serve, and franchise owners purchase roughly 40 percent of their goods and services from other local businesses. Beyond economic activity, franchisees are deeply engaged in community service — with more than 80 percent contributing to local charities through donations, fundraising, and volunteerism.

In just one year, U.S. franchisees donated $2.3 billion, raised an additional $2.6 billion, and contributed 34 million volunteer hours to causes in their communities, demonstrating that franchising’s impact extends far beyond the balance sheet.

Why the Franchise Model Matters

Taken together, the findings confirm that franchising uniquely blends brand systems with local ownership to deliver stronger jobs, expanded access to entrepreneurship, and deeper community investment. At a time when policymakers and communities are focused on economic resilience and opportunity, franchising continues to prove its value as a model that works — for workers, business owners, and local economies alike.

To explore the full data, analysis, and findings, read The Value of Franchising report, available now on franchise.org.

👉 Read the full report: The Value of Franchising

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