Franchises added nearly 1 million new jobs in the United States over the past five years. Employment in the sector grew at an average annual rate of 2.6% over that time, far outpacing employment growth across all industries.
While the concept of franchising dates back to tax collection licensing schemes in the Middle Ages, the current franchise business model started around the mid-20th century. In exchange for an initial fee and ongoing royalties, franchisees effectively buy the rights to operate a franchisor’s business. They also receive training, support, and additional services from their parent company. By offering entrepreneurs the opportunity to open a business within an established system under a popular brand name, the franchise model can provide companies the potential for rapid growth and expansion into new markets.
Every franchising agreement is different, and the potential for success for franchisees depends on their initial startup investment and later fees, the support they receive from their franchisor, brand strength, and the financial stability of their parent company.
To determine the fastest growing franchises, 24/7 Wall St. ranked businesses on franchise establishment growth in the United States from 2012 to 2017 with data from Entrepreneur magazine. Only companies included in Entrepreneur’s 39th annual Franchise 500 ranking with at least 500 U.S. franchise establishments were considered.