US Franchising Statistics Report: 2023 Recap and 2024 Forecast

Javier Barragan
April 18, 2024

The US franchising industry has demonstrated resilience and growth amidst economic challenges, contributing significantly to the economy. This report provides an in-depth analysis of franchising trends in 2023 and forecasts for 2024, offering valuable insights for stakeholders. The franchising model has proven to be a robust engine for business expansion and job creation, making it a vital component of the US economic landscape.

Executive Summary

  • In 2023, franchising exceeded projections with a 2.2% growth in establishments, reaching 806,270 units, despite economic headwinds such as inflation and supply chain disruptions.
  • Key growth sectors included personal services and quick service restaurants (QSRs), which showed remarkable adaptability to changing consumer preferences.
  • The 2024 forecast predicts a 1.9% increase in franchise establishments to 821,589 units and a 4.1% increase in total franchise output to $893.9 billion, signaling continued confidence in the franchising model.

Overview of Franchising Industries

The franchising industry encompasses various sectors, each with unique trends and performance metrics. The table below provides a summary of key statistics for major franchising sectors in 2023 and forecasts for 2024.

2023 Establishments
2024 Forecasted Growth
2023 Output ($ Billion)
2024 Forecasted Growth
Business Services
Commercial & Residential Services
Personal Services
Real Estate
Retail Food Products & Services

Source: FRANdata, 2024 Franchising Economic Outlook

Industry Breakdown: Pet Franchise Industry

The Pet Franchise Industry has seen significant growth in recent years, driven by increasing pet ownership and consumer spending on pet-related products and services.

Market Size and Employment Outlook:

  • Total Pet Industry Spending (2022): $136.8 billion, up from $123.6 billion in 2021.
  • Pet Ownership: 66% of U.S. households own a pet, with dogs being the most popular.
  • Employment Growth: The U.S. Bureau of Labor Statistics projects a 16% growth in the animal care and service workers sector from 2022 to 2032.

Spending Breakdown (2022):


($ Billion)
Percentage of Total
Pet Food & Treats
Vet Care & Product Sales
Supplies, Live Animals & OTC Medicine
Other Services*

Source: FRANdata, 2024 Franchising Economic Outlook

Pet Ownership Statistics:

Pet Type
Number of U.S. Households (Millions)
Freshwater Fish
Saltwater Fish
Small Animal

Source: FRANdata, 2024 Franchising Economic Outlook

Franchise Opportunities:

  • Ideal Franchise Candidate: Community-minded, pet-centric individuals with strong leadership and communication skills.
  • Initial and Opening Franchise Costs: Vary depending on the franchise; detailed estimates can be found in the Franchise Disclosure Document (FDD).
  • Ongoing Franchise Fees: Include royalty fees, technical support charges, and marketing costs.

Industry Breakdown: Home-Based Franchise Industry

The Home-Based Franchise Industry has become increasingly popular, offering flexibility and lower investment costs. Below is a table highlighting key aspects of this industry:

Market Overview:

  • Percentage of Small Businesses Home-Based: Over 51% of all small businesses in the United States are home-based.
  • Annual Revenue: Home-based businesses generate nearly $430 billion per year nationally.
  • New Business Start Rate: It's estimated another home-based business starts every 12 seconds.
  • Success Rate: 70% of home-based businesses are still considered "successful" after three years of founding.
  • Employee Statistics: Approximately 60% of home-based businesses do not have additional employees.

Key Attractions:

Low Financial Investment
Home-based franchises typically require lower initial investments, making them more accessible.
Time Efficiency
The ability to operate from home can significantly reduce commute time and allow for faster business setup.
Schedule Flexibility
Home-based franchises offer the flexibility to balance work and personal life, appealing to a wide range of entrepreneurs.

Source: FRANdata, 2024 Franchising Economic Outlook

The Rise of "Parentpreneurs":

A growing segment of home-based franchisees is parents seeking to balance career and family commitments. Franchising provides a structured business model with support from the franchisor, making it an attractive option for parentpreneurs.

Challenges and Considerations:

  • Stigma: While diminishing, there can still be a perception challenge around the legitimacy of home-based businesses.
  • Isolation: Working from home can lead to feelings of isolation and require discipline to maintain productivity.
  • Zoning and Regulations: Home-based businesses must comply with local zoning laws and may face restrictions on certain types of activities.

Industry Breakdown: Retail Franchise Industry

The Retail Franchise Industry is closely tied to the overall economy, with consumer disposable income being a key driver. The industry is evolving rapidly, especially in the integration of in-store and online experiences.

Future Outlook:

  • Projected Growth (2023): 3.2% increase in franchise retail output, amounting to a $4 billion rise over 2022.
  • Pandemic Impact: Accelerated the merging of in-store and out-of-store customer experiences.
  • Industry Focus: Increasing customer touchpoints by providing holistic solutions, such as curbside pickup, same-day delivery, and flexible payment options.

Big Trend: The Retailing of Healthcare

  • Healthcare Franchises: Increase in healthcare-related retail franchises, such as vision care, hearing aids, and chiropractic care.
  • Consumer Shift: Healthcare providers are adopting retail-like goals, including convenient locations and lower-cost care delivery systems.
  • Retail Makeover: Healthcare services are increasingly being offered in retail settings, enhancing the customer experience.

Key Factors for Success:

  • Marketing: Understanding the target market and effectively reaching customers through marketing is crucial.
  • Location: For physical retail franchises, selecting the right location is essential for success.

Industry Breakdown: Gym and Fitness Franchise Industry

The Gym and Fitness Franchise Industry has shown resilience and innovation, especially in adapting to the changes brought about by the pandemic. Below is a table highlighting key aspects of this industry:

Market Overview:

  • Market Size (2023): $7 billion
  • Major Franchisors: Anytime Fitness, F45 Fitness, Jazzercise, Planet Fitness, Orangetheory Fitness, Snap Fitness, Xponential Fitness
Market Size (2023)
$7 billion
Major Franchisors
Anytime Fitness, F45 Fitness, Jazzercise, Planet Fitness, Orangetheory Fitness, Snap Fitness, Xponential Fitness
Future Outlook (Through 2028)
Focus on healthy lifestyles, convenient establishments, around-the-clock services, and up-to-date fitness technology
Pandemic Adaptation
Shift towards hybrid fitness models combining in-person and online workouts
Buying a Fitness Franchise
Success factors include game planning, realistic capacity assessment, and identifying blind spots
Initial Investment
Costs vary; influenced by real estate, equipment, and franchise fees
Ongoing Fees
Royalty fees for trademarks and operational support, along with other as-needed fees
Big Trend
The retailing of healthcare, with an increase in healthcare-based retail franchises

Source: FRANdata, 2024 Franchising Economic Outlook

Future Outlook (Through 2028):

  • Projected Growth: Focus on healthy lifestyles, convenient establishments, and up-to-date fitness technology.
  • Trends: Gyms offering meal planning, goal tracking, online personal training, and user forums are expected to attract a large customer base.
  • Challenges: Rising healthcare costs due to obesity and related health ailments.

Adapting to the Pandemic:

  • Hybrid Fitness Model: The pandemic accelerated the shift towards a hybrid model, combining in-person and online workouts.
  • Consumer Preferences: Home workouts and digital fitness options have become more popular, leading to changes in how fitness franchises operate.

Buying a Fitness Franchise:

  • Success Factors: Former athletes have found success by applying their sports discipline and game planning to franchising.
  • Initial Investment: Costs vary depending on the franchise, with factors such as real estate and equipment influencing the total investment.

Key Considerations:

  • Ongoing Fees: Franchisees should expect to pay royalty fees for the use of trademarks and operational support.
  • Market Research: Understanding customer behavior and preferences is crucial for success.

The Top 10 States For Franchise Growth in 2024

In 2024, the franchise industry is poised to drive economic progress by creating employment and business opportunities across various levels in the United States. The Southeast region is anticipated to lead, hosting about 30% of all franchised businesses in the country, with a significant workforce and substantial revenue generation. The Midwest follows, with a considerable number of establishments and economic output.

Source: FRANdata, 2024 Franchising Economic Outlook

FRANdata's analysis suggests that the Southeast and Southwest regions will see the most substantial growth in franchising in 2024, outpacing the national average. This expansion is attributed to demographic shifts and a burgeoning industry landscape attracting more workers to the South.

The landscape of economic growth is diverse across states, influenced by factors such as the business climate, population dynamics, infrastructure, and industry composition. FRANdata's projections indicate that the top growth markets for franchising in 2024 will include states like Texas, Florida, Georgia, and North Carolina, among others. Texas, with its strong economy and growth in both industry and population, is expected to maintain its position as a leading state for franchising.

The Southeastern U.S. is experiencing population growth as people move in search of lower living costs and job opportunities. States like South Carolina and Florida are witnessing rapid growth due to their attractive living conditions and pro-business policies, which are expected to boost their franchising sectors.

However, the franchise industry faces challenges at the state level, including minimum wage increases in 25 states, which will raise labor costs. States like California and Washington are predicted to experience slower growth in franchising due to rising costs and regulatory changes. In particular, California's new law banning "junk fees" will impact restaurants and quick-service establishments by requiring menu prices to reflect the total cost, potentially deterring consumers with higher perceived prices.

Financial Performance of 2023 and 2024 Forecast

The financial performance of the franchising industry is a key indicator of its health and growth potential. In 2023, the total revenue generated by franchising was estimated at $858.5 billion, with a forecast of $893.9 billion for 2024, indicating a steady growth trajectory. The average revenue per franchise and profitability trends have shown positive growth, reflecting a healthy and expanding industry.

The table below provides a breakdown of key financial metrics for the franchising industry in 2023 and forecasts for 2024:

Financial Metric
2023 Estimate
2024 Forecast
Percentage Change
Total Revenue ($ Billion)
Average Revenue per Franchise ($)
Total Franchise Establishments
Total Franchise Employment
Franchise GDP Contribution ($ Billion)

Source: FRANdata, 2024 Franchising Economic Outlook

Investment trends in franchising have shifted towards sectors with lower initial investment costs and higher potential returns, reflecting a strategic approach to capital allocation. The average initial investment required to open a franchise varies significantly across different sectors, with some sectors like QSRs and personal services offering more affordable entry points compared to more capital-intensive sectors like lodging.

The profitability of franchises has been impacted by various factors, including labor costs, supply chain challenges, and regulatory changes. However, successful franchises have leveraged operational efficiencies, technological innovations, and strategic pricing to maintain healthy profit margins.

Looking ahead to 2024, the franchising industry is expected to continue its growth trajectory, driven by consumer demand, technological advancements, and the expansion of franchise brands into new markets. Franchisors and franchisees will need to closely monitor financial performance metrics to ensure sustainable growth and profitability.

Source: FRANdata, 2024 Franchising Economic Outlook

Challenges and Opportunities of 2024

The franchising industry faces several challenges, but with these challenges come opportunities for growth and innovation. Below is a detailed table highlighting key challenges and opportunities in the franchising sector:

Implications for Franchising
Labor Shortages
Many industries within franchising are experiencing difficulties in recruiting and retaining skilled workers.
Franchises can invest in employee training and development programs, offer competitive compensation and benefits, and leverage technology to streamline operations.
Regulatory Hurdles
Growing consumer focus oFranchises often navigate complex regulatory environments, including zoning laws, health and safety regulations, and labor laws.n physical and mental well-being is driving demand for fitness centers, healthy eating options, and wellness services.
Staying informed about regulatory changes and proactively complying with regulations can help franchises avoid legal issues and build a reputation for reliability and trustworthiness.
Economic Uncertainty
Fluctuations in the economy, such as inflation, interest rate changes, and recession fears, can impact consumer spending and business investment.
Franchises can focus on financial planning and risk management strategies, such as diversifying revenue streams and maintaining strong cash reserves, to weather economic uncertainties.
The franchising industry is highly competitive, with numerous brands vying for market share in various sectors.
Franchises can differentiate themselves through unique value propositions, exceptional customer service, and continuous innovation in products and services.
Technological Disruption
Rapid advancements in technology can disrupt traditional business models and require franchisees to adapt quickly.
Embracing technological innovations and integrating them into business operations can help franchises stay ahead of the curve and meet evolving consumer expectations.
Market Saturation
In some sectors, the market may become saturated with similar franchises, making it challenging to stand out and attract customers.
Conducting thorough market research and identifying underserved niches or emerging trends can help franchises find opportunities for growth in crowded markets.
Global Expansion
Expanding a franchise internationally presents challenges such as cultural differences, legal complexities, and logistical hurdles.
Franchises can leverage international partnerships, conduct in-depth market analysis, and adapt their business models to local preferences to successfully enter and thrive in new markets.

Source: FRANdata, 2024 Franchising Economic Outlook

Franchise Development and Expansion of 2023 and 2024 Forecast

The franchising industry is experiencing dynamic growth and expansion, driven by innovative strategies and market demands. Below is a statistical table highlighting key trends in franchise development and expansion:

2023 Estimate
2024 Forecast
Percentage Change
Multi-Unit Franchising
54% of franchisees own multiple units
58% forecasted
Co-Branding Opportunities
12% increase in revenue for co-branded units
Expected to rise
Emerging Markets
15% growth in franchise establishments
20% forecasted growth
Franchise Unit Growth
2.2% increase in total franchise units
1.9% forecasted growth
International Expansion
25% of franchisors exploring overseas markets
30% forecasted

Source: FRANdata, 2024 Franchising Economic Outlook

Key Insights:

  • Multi-Unit Franchising: The trend towards multi-unit ownership continues to grow, with an increasing number of franchisees expanding their portfolios to include multiple locations.
  • Co-Branding Opportunities: Franchises that combine two or more brands under one roof are seeing significant revenue growth, indicating a successful strategy for maximizing space and attracting diverse customer segments.
  • Emerging Markets: Franchisors are increasingly looking towards emerging markets for expansion, with a projected 20% growth in franchise establishments in these regions by 2024.
  • Franchise Unit Growth: Although the overall growth rate in the number of franchise units is expected to slightly decrease, the industry continues to expand, indicating a healthy and robust franchising sector.
  • International Expansion: The interest in international expansion is on the rise, with 30% of franchisors expected to explore overseas markets by 2024, highlighting the global appeal of franchising as a business model.

Final Thoughts

In as we look forward to 2024, the industry is expected to continue its growth trajectory, driven by evolving consumer preferences, technological innovations, and strategic market adaptations. Franchisors and franchisees alike will need to stay agile and responsive to capitalize on emerging opportunities and navigate the challenges ahead. The future of franchising remains promising, with ample potential for entrepreneurs and businesses to thrive in this ever-changing landscape.

Apply Now

Unlock exclusive expert advice and cashback offers by completing this quick form - don't miss out!
Thank you for your interest. We will email you information on next steps.
Oops! Something went wrong while submitting the form.