If you’re thinking about franchise ownership, you’ve likely had some questions about the risks involved. What are the success rates of franchises? What traits are important for franchise leadership? These are questions we discuss with potential franchisees at Home Franchise Concepts, and here are some of the insights we share when talking about franchise ownership.

The Franchise Forecast

One of the most important franchising statistics is that the industry has remained steady throughout many economic ups and downs. In the past 15 years, there have been more than 700,000 franchise establishments in the U.S. (except for 2013 when there were 697,943). Those numbers have remained stable and are growing. In fact, there are projected to be more than 15,000 new franchises opened in 2024, bringing the total number up to more than 821,000 businesses.

Growth in franchising has been spurred by a national interest in business ownership, and the number of people pursuing a business has more than doubled in 10 years. Statistics show explosive growth in business formation applications in the past decade, starting with 2.575 million in 2012 to 5.5 million in 2023.

Understanding Franchising Statistics

 In general, the success rates of franchises are high, but there is no magic formula for guaranteed franchise success. If you’re considering launching a career as a franchise owner but are wondering about the success rate, here are some recent statistics from the International Franchise Association (IFA):

• Franchise businesses are projected to contribute $893 billion of economic output into the U.S. economy in 2024
• Franchises are expected to contribute to 4.1% of the total nominal Gross Domestic Product (GDP) in 2024
• In 2024, the overall number of franchise establishments was projected to increase to 821,000 units, and franchising added nearly 221,000 new jobs

 Helpful Traits for Franchise Owners

As a long-standing franchisor, we’ve observed that there are many similarities between our franchisees and this Entrepreneur list of 10 traits of the most successful franchise owners: 

1. Passionate about their franchise’s concept
2. Patient while the business gets established
3. Resilient enough to weather the ups and downs of running a business
4. Collaborative for enhanced success
5. Involved in their community
6. Consistent in following the franchise system
7. Hardworking, having hustle and initiative
8. Focused on expansion
9. Good soft skills
10. Confident

Instead of looking at franchise success rates and franchise failure rates as an indication of whether franchising is right for you, look instead at what you want from franchise ownership and find the brands that most align with your goals. Once you have a short list, you can request franchising statistics pertinent to that franchise in the franchise disclosure document (FDD).

Item 20 of the FDD

All U.S. franchises must adhere to the federal Franchise Rule, which requires franchisors to disclose certain information about their business through the FDD. Item 20 of the FDD includes data about the number of outlets for the three most recent fiscal years, contained in five tables:

• Table 1: A Summary of Outlets. This includes outlet type (company-owned, franchised, and total), outlets at the start and end of the year, and net change.
• Table 2: Transfers. Information about transfers of outlets over the last three fiscal years. A transfer happens when the controlling interest in the franchise is transferred to someone other than the current owner.
• Table 3: Status Change – Franchised Outlets. Changes in the status of franchised outlets over the last three fiscal years. This can include terminations, non-renewals, those reacquired by the franchisor, and those that ceased operations for other reasons.
• Table 4: Status Change – Company-Owned Outlets. Changes in the status of company-owned outlets during the last three fiscal years.
• Table 5: Projections. Projected new outlet openings in the next fiscal year and the total number of franchise agreements signed by new franchisees but whose outlets remain unopened.

Knowing that a certain industry is doing well is one thing. Knowing that a certain franchise within that industry is doing well is quite another. This is your most accurate information about a franchise because it gives you an idea of whether the franchise is growing or declining.

Start Your Research with Home Franchise Concepts

Choosing to become an entrepreneur through franchising gives many people the support and confidence they need to launch their business. The success of franchises is a combination of the franchise opportunity and the owner’s commitment to the business. That collaborative relationship is a strength of Home Franchise Concepts and our family of brands: Budget Blinds®, The Tailored Closet®, PremierGarage®, Concrete Craft®, AdvantaClean®, Lightspeed Restoration®, Kitchen Tune-Up®, Bath Tune-Up®, Two Maids®, and Aussie Pet Mobile®.

At Home Franchise Concepts, we’ve built leading brands with protected franchise territories across the U.S. and Canada while continuously enhancing the benefits of ownership.

If you are interested in franchising or franchising opportunities in the home services industry, contact us to start the conversation.