FranNet Study Boasts Franchise Success Rate Statistics

Detailed Survey Shows 91% Success Rate for Franchises, 42% Higher Than Typical Small Businesses

August 23, 2013 // // LOUISVILLE, KY - FranNet, North America’s most well respected network of franchise consultants helping aspiring entrepreneurs achieve franchise ownership, released a detailed survey of the success and failure rates of franchise businesses.

FranNet conducted a detailed survey of 1,260 franchises it helped open from 2006 to 2010. The survey showed that 91.2 percent of the franchises FranNet helped open were still in business after two years.

This number contrasts sharply with data from a special tabulation by the Bureau of the Census produced for the Office of Advocacy of the U.S. Small Business Administration a little over a decade ago, the most accurate and recent data available on small business success rates.

The U.S. Census data showed that only 64 percent of small businesses survived the first two years of operation, and only half were still in business after four years. By contrast, during the timeframe when FranNet studied small businesses, 85 percent of the businesses that it helped open were still in operation through five years.

FranNet's survey is important because it shows that franchised businesses enjoy success 42 percent more often than small businesses. Viewed differently, the U.S. Census report showed that 36 percent of small businesses failed within two years, compared to less than 9 percent of franchised businesses placed by FranNet.

The FranNet survey covered the majority of the recent recession -- one of the most difficult business climates in the last 50 years.

"Accurate small business and franchise success rate data are very difficult to come by," said Jania Bailey, President and COO of FranNet. "It is often speculated that franchises are less risky and have a higher success rate than most small businesses, and we are excited about the implications our survey brings to light."

FranNet works with individuals who are interested in business ownership, and who are looking for a business opportunity typically on the heels of a successful corporate career. FranNet uses a personal franchise assessment, a sort of personality test of one’s business acumen, to assess an individual from many facets, including focusing on their behavior profile, risk tolerance and financial background. These attributes are combined with what the company has learned in the marketplace over the 25 years they’ve been in business to ideally match the person to a franchise concept.

About FranNet

FranNet is North America’s most respected leader in matching individuals with franchise opportunities. Based in Louisville, Ky., FranNet has more than 80 consultants across North America who use a proprietary profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of entrepreneurs to rewarding small business opportunities. FranNet has been recognized by INC magazine as one of the top 500 fastest growing private companies in America for the last three years.



John Blair
Director, Marketing and PR
P: 502.719.8350


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