Report Objectives and Importance

The first objective of The Economic Impact of Franchised Businesses report is to estimate the amount of activity generated within franchised businesses.

In 2007, American franchised businesses provided:

• 9.1. million jobs
• $304.4 billion in payroll
• $802.2 billion of economic output
• $468.5 billion to GDP

These numbers illustrate significant growth since 2001. Overall, the number of franchised establishments in the U.S. grew at an average annual rate of 4.3 percent between 2001 and 2005. More importantly, the number of jobs in franchised businesses grew at an average annual rate of 3.0 percent over the same period.

Economic Significance

The economic significance of franchising is greater than the activity in franchised businesses alone. Franchised businesses generate economic activity in other businesses, which is described as the indirect economic impact. Taking into consideration economic activity in franchised businesses and additional economic activity caused by franchised businesses, the total contributions to the U.S. economy in 2007 were:

• 17.4 million private non-farm jobs, or 11.8 percent of the total

• $707.6 billion private non-farm payroll, or 9.7 percent of the total

• $2.1 trillion of private non-farm output, or 9 percent of the total

• $1.2 trillion of private non-farm GDP, or 9.7 percent of the total

Overall contribution to GDP because of franchised businesses accounted for 8.4 percent of total U.S. GDP, including government and farm sectors in 2007.