What percentage of franchises succeed?

What percentage of franchises succeed?

When starting a business, buying a franchise is one of the most popular routes. The allure of a tried-and-true business model, brand recognition, and support from a larger network can be incredibly appealing. But how often do franchises succeed? Let’s delve into the data and explore what percentage of franchises succeed.

Defining Franchise Success

Before we dive into the numbers, it’s essential to define what we mean by ‘franchise success.’ For some, success might mean turning a profit within the first year. For others, it might mean expanding to multiple locations. Yet for others, it could simply mean staying in business for more than five years. Success is subjective and can vary greatly depending on the franchise owner’s goals and expectations.

However, for the sake of this discussion, we’ll define franchise success as a franchise that remains operational and profitable for at least five years. This is a standard benchmark used in the business world to gauge the longevity and viability of a business.

Franchise Success Rates: The Statistics

Let’s get to the heart of the matter: what percentage of franchises succeed? According to several studies, the success rate of franchises is significantly higher than that of start-up businesses. It’s estimated that about 90% of franchises are successful.

However, it’s important to note that this figure can vary depending on the industry, the specific franchise system, and the level of support the franchisor provides. For example, franchises in the fast-food industry may have a higher success rate than those in the retail industry. Similarly, franchises that are part of a well-established, reputable franchise system with a strong support network are more likely to succeed than those that are not.

Why Do Franchises Succeed?

For several reasons, franchises tend to have a higher success rate than start-up businesses. One of the main reasons is that franchises come with a proven business model. This means that franchisees can avoid many trial-and-error pitfalls that often plague start-ups.

Another key factor is the support provided by the franchisor. This can include training, marketing assistance, and ongoing operational support. Access to this support level can significantly increase a franchisee’s chances of success.

Factors That Can Impact Franchise Success

While franchises generally have a high success rate, several factors can impact a franchise’s chances of success. These include the franchisee’s level of business experience, the amount of capital they have to invest, and the level of support the franchisor provides.

Additionally, the franchise’s location can significantly affect its success. A franchise in a high-traffic area with a large target market is more likely to succeed than one in a less populated or less frequented area.

Understanding the Risks

Despite the high success rate of franchises, it’s important to remember that buying a franchise is not a guaranteed path to success. Like any business venture, it comes with risks. The initial investment can be substantial, and there’s always the possibility that the business could fail.

Therefore, prospective franchisees must do their due diligence before investing in a franchise. This includes researching the franchise system, talking to current and former franchisees, and consulting with a franchise attorney or advisor.


In conclusion, while the success rate of franchises is generally high, success is not guaranteed. Prospective franchisees must consider their options carefully, do their homework, and be prepared to put in the hard work necessary to make their franchise successful.

Remember, success is subjective and can vary greatly depending on your goals and expectations. So, before diving into the franchising world, take the time to define what success means to you.

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