Report Measures The Economic Importance Of Franchise Operators - Open for Opportunity

By Kerry Pipes

This article originally appeared in on September 29, 2021. Read the full piece.

A first-of-its-kind report from the International Franchise Association (IFA) and Oxford Economics sheds light on the impact and importance of franchising in America.

The report, The Value of Franchising, details how franchisees are local business leaders who contribute to economic growth, job creation, and charitable endeavors in their communities. The report also coincides with the IFA’s newly launched, purpose-driven campaign, Open for Opportunity, highlighting the stories of members and what it truly means to be part of the franchising community.

“Today’s report shows how important franchises are to driving our economy forward as we recover from the Covid-19 pandemic. The advantages of the franchise model are undeniable. They drive higher sales, employ more workers than their counterparts and are demonstrated leaders within their own communities, contributing to economic growth, job creation, and charitable endeavors,” said Matthew Haller, president and CEO of the International Franchise Association. “This report, in conjunction with our campaign establishes how franchises are part of something bigger than ourselves. We are rising to our community’s challenges and the franchise model is working—for our families, our neighbors, and our communities.”

Key highlights from the report illustrate how franchisees:

  • Report sales 1.8 times as large as comparable non-franchise establishments, on average. Black-owned franchises earn 2.2 times as much in sales compared to Black-owned independent businesses, on average.
  • Provide 2.3 times as many jobs than their non-franchise counterparts, on average.
  • Pass their success on to employees in the form of higher wages and benefits and greater opportunity for advancement.
  • Pay 2.2 – 3.4 percent higher wages than similar non-franchises.

The report also noted that more than 65 percent of franchise workers are offered health insurance – a greater proportion than among small establishments in general.

More than 4,000 franchise operators were surveyed for the report.