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Franchise Development Facts and Trends

As the demand for franchises continues to expand, it’s important to keep in mind some key franchising facts and trends to give you a sense of the market for franchised businesses.

  1. According to the International Franchise Association, a growing number of minorities and women are making their mark on the franchise world, because franchising helps them get over obstacles like a lack of business experience and funding. Franchisors offer the training necessary to run the business, along with ongoing assistance, and can even help the franchisee arrange for financing.
  2. International franchising has grown in popularity as well, now with more than 400 franchise systems successfully operating internationally. These types of franchises continue to thrive because customers all over the globe seek out the brand for its reputation for consistency and quality.
  3. According to a 2001 report, there were 767,483 units in all franchise systems in the U.S. (owned by franchisor or franchisee), and these franchises employed approximately ten million people. These franchises made up more than 50 percent of fast food restaurants, 18 percent of hotels and motels, and 13 percent of sit-down/full service restaurants.
  4. Growth industries predicted in franchising for the next decade take into account the boom in our aging population, more women in the workforce, and advancements in technology and communications. These rising markets include: health aids and care services, personnel and temp services, home services such as carpet cleaning and repair and renovations, educational products and services, and environmental services.
  5. Because Americans have become an increasingly mobile society, consumers crave the consistency a franchised brand can provide and use this brand recognition as an easy way to guarantee a positive experience when dining out, staying at a hotel, or using a copy service. As opposed to the “cookie cutter” franchise model having a negative impact on consumers, it is actually a positive way to draw in crowds seeking an easy way to identify reliable goods and services.
  6. Depending on the type of franchise you wish to pursue, your investment start-up costs could be as little as $20,000 or less, or well over a million dollars, depending on the area you are getting into, the real estate costs, or leasing requirements. Typically an initial franchise fee is between $10,000 to $30,000, with more than 70 percent of franchisors charging $40,000 or less for this initial expense.
  7. A Veteran franchising program, VetFran, was introduced by the International Franchise Association in partnership with Veteran’s Affairs and the U.S. Small Business Administration in order to help returning veterans to transition to civilian life and establish their own businesses. This program offers financial incentives to honorably discharged soldiers to smooth their path to franchise ownership
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