U.S. Census Bureau releases its first franchise report

Sept. 13, 2010 | by

The U.S. Census Bureau has issued its findings from the 2007 Economic Census Franchise Report. This is the first detailed report by the bureau on this aspect of the country's economy.

The report concluded that franchise businesses accounted for 10.5 percent of all businesses with paid employees in 295 industries. Among the 4.3 million businesses surveyed, 453,326 were either franchisee or franchisor-owned.

Also, franchise businesses accounted for about $1.3 trillion of the $7.7 trillion in total sales for these industries, $153.7 billion out of the $1.6 trillion in total payroll, and 7.9 million workers out of a total workforce of 59.0 million.

The survey was conducted via a partnership between the Census Bureau and the International Franchise Association. Previous economic censuses only included franchising questions for limited-service (QSRs) and full-service restaurants.

"The understanding we gain from these statistics about what impact franchise businesses have on the U.S. economy is a good example of how government and business can partner to provide relevant, quality data to the business community," said Tom Mesenbourg, deputy director of the U.S. Census Bureau.

The report includes statistics on the number of businesses with paid employees engaged in franchising, annual sales for these businesses, and employment and payroll. The data is presented in three categories: franchisor-owned businesses, franchisee-owned businesses and all businesses and looks at areas such as paid employees in franchising, annual sales for franchisees and employment and payroll.

Among franchise businesses, 77.4 percent of the them were franchisee-owned, accounting for $1.1 trillion in sales, $125.1 billion in annual payroll and employing nearly 6.3 million workers. Franchisor-owned businesses made up 22.6 percent of franchise businesses, with $210.4 billion in sales, $28.6 billion in annual payroll and 1.6 million workers.

From the report:

  • Limited-service restaurants or fast food restaurants, had the highest number of franchise establishments with paid employees (124,898), followed by gas stations with convenience stores (33,991) and full-service restaurants (30,130).
  • New car dealers led in sales for franchise establishments ($687.7 billion), followed by gas stations with convenience stores ($131.1 billion) and limited-service restaurants ($112.6 billion).
  • Limited-service restaurants also had the third highest percentage (59.1 percent) of franchise establishments compared with all establishments within that industry, surpassed only by new car dealers(100 percent) and private mail centers (67.9 percent).

The 2007 Economic Census Franchise Report does not include data for nonemployer businesses.



Topics: Franchising & Growth

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