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Seven Year Franchise Study Reveals Interesting Statistics

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Here is a preview of a new study by franchisegrade.com that provides insight into the trends and performance of the franchise industry over the past 7 years

A recent study conducted by franchisegrade.com utilized Franchise Disclosure Document (FDD) information and data from the years 2010 to 2015. The study included 243 franchise systems or 10% of the franchise systems in the franchisegrade.com FDD database. The 243 franchise systems ended 2014 with 266,195 outlets which represents 62% of all franchise outlets in the database. Between 2008 and 2015, an estimated $163.9 billion was invested into these 243 franchise systems by new franchisees

The results from the study revealed that there are two sub-sectors in the franchise industry. The sub-sectors are the franchise systems with positive growth, high success rates, and positive performance based attributes and franchise systems with negative growth and low success rates. Dividing the sample into positive and negative growth franchise sectors resulted in 164 positive growth franchise systems and 79 negative growth franchise systems or 67.5% of the franchise systems had positive growth, while 32.5% had negative growth.

A distinguishing characteristic of these two groups is that the negative growth franchise systems had more combined franchise outlet terminations, non-renewals and ceased operations than the positive growth systems. Healthy franchise systems in this sample grew by a minimum of 4.1% per year since 2008 which is 4 times the franchise industry average.

The report provides an in-depth view into franchise industry performance over a seven year period. Click here for a complimentary pre-publish copy.

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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