How Big is Franchising?

I went to a restaurant franchise conference when I was working in Hotels in 2013. Although the ticket was one-third of my salary, it gave me an opportunity to meet the CEO’s of top Chains such as Domino’s, Subway and Mainland China, a home-grown fine dining restaurant in India. Now I am pursuing MBA in Montreal and a benefactor gave $ 1 Million endowment to the university. I was amazed by looking at person’s name as we come from same part of India and he is America’s largest Subway Franchise owner. So I think there is a strong connection between me and franchise business. During that conference, I thought Franchising is mainly for restaurants but I was wrong.
Franchising is not only done in restaurants or retail but also in 300 business lines categorized into 10 general areas – Automotive, Business Services, Commercial & Residential Services, Lodging, Personal Services, Quick Service Restaurants, Real Estate, Retail Food, Retail Products & Services and Full-Service Restaurants. Most people associate franchising to big restaurant brands like McDonald’s and Subway but the majority of franchise owners own one unit and employ less than 30 people. The American franchisees have more than 95% consumers outside America. Canada is ranked as Top market outside US for Franchising based on regulatory policy, infrastructure, labor force, demand and industry input. Franchising industry is a leading job creator, one in seven people are employed by franchisees in US. There are around 8,00,000 establishments in Franchising and account for 50% of retail sales. Franchising contributes to 3% of US GDP at $552 Billion.

Some of leading firms in different industries:

  Name Sales in Billion ($ US)             Locations
 
McDonald’s
                 87.78               36258
7-Eleven                  84.50                55801
Marriott Hotels & Resorts  9.60  5780
Hertz (Car Rental  14.20 11,230
Anytime Fitness    1.1 3,000

So next time you come across a store which you have seen at multiple locations, there is a strong possibility that it is a Franchisee.

 

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