IFA Report Highlights Franchise Model Benefits to American Communities, Workers and Small Businesses

Based off survey data from nearly 3,000 franchisees and an analysis of detailed payroll data, study details how America’s 831,000 franchised businesses provide for stronger employers, greater business ownership opportunities, and local community involvement

“This study confirms that franchises are small business, and the benefits of the franchise business model are powerful for employees, aspiring small business owners, and the communities where they operate across America and the world,” said Matt Haller, IFA President and CEO. “As America celebrates its 250th anniversary, this report underscores how one of the greatest American inventions – franchising – has not only created millions of small business owners, but also enabled these small businesses to be more generous employers and remain entrepreneurs at heart. Franchising has opened doors to millions of business owners and their employees from all walks of life, and this report proves why the growth of franchising, and the jobs it creates, continue to outpace other business models.”

The 2026 Value of Franchising report, developed from a survey of nearly 3,000 franchise owners nationwide conducted in 2025 and an analysis of detailed payroll data provided by Paychex, shows that:

• Franchises are local, small businesses who give back to their communities. 82% of franchisees own only one location. (source: FRANdata) 85% of franchisees live and work in the communities they serve. 83% of U.S. franchisees gave to local charities in the past year. Franchisees purchase an average of 40% of goods from other local businesses in their community.

• Franchises offer employees stronger wage growth, benefits, and career growth. Wages grow faster over time for employees at franchised businesses than non-franchises. Franchise employees are 3-7 percentage points more likely to receive key benefits than non-franchised businesses, including health insurance and paid leave. Part-time franchise employees are approximately 20% more likely to transition into full-time roles than non-franchise employees. Across similar sectors of the economy, franchise employment grew 10% faster than non-franchise employment between 2021 and 2024.

• Franchising is a proven path to business ownership. 64% of franchisees are first-time business owners. 30% of franchisees say they would not own a business at all without franchising. Underrepresented groups, such as veterans, women and people of color, are represented as franchisees at a disproportionately higher rate.

The report further describes the diverse nature of franchised businesses, despite commonly being perceived as fast food restaurants, and how franchised businesses are truly small businesses, with 94% having less than 50 employees. Nearly half (47%) of all franchised brands are relatively small, operating 25 units or less, and only one quarter of all franchises are quick-service restaurants.

“The Value of Franchising report demonstrates that independent franchise owners are local business leaders who contribute disproportionately to economic growth, job creation, wealth distribution, and charitable endeavors in their communities,” said Hamilton Galloway, Head of Consultancy, Americas at Oxford Economics. “Through both survey data and econometric analysis, this report provides compelling data, exhibiting the value provided by businesses that use the franchise model to their industries and communities.”

The report builds off an original version of The Value of Franchising, commissioned in 2021, which also found that franchises drive higher sales and provide more jobs than comparable non-franchise establishments, while passing on their success on to employees in the form of higher wages and benefits and greater opportunity for advancement.

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 831,000 franchise establishments that support nearly 8.8 million direct jobs, $896.

IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.