2024 Dominators

By: Ambika Oberoi
Published: December 20th, 2024

The U.S. franchising landscape has undergone a significant transformation over the past decade, marked by a notable increase in multi-unit franchisee ownership. Recent data from our franchisee database reveals that there are approximately 42,891 multi-unit operators (MUOs) in the country, collectively managing 241,380 units. MUOs now control 56% of all franchised units, highlighting their growing influence within the industry. On average, an MUO today owns 5.5 franchised units, up from 4.9 units a decade ago, reflecting a steady annualized growth rate of 1.1%.

Ownership dynamics have also shifted with franchise transfers increasing at a compound annual growth rate (CAGR) of 4.8% over the past decade. This trend points to an active and fluid market as franchisees buy and sell existing units more frequently than in the past. Despite the industry’s growth, challenges have emerged, particularly in the QSR sector. Major multi-unit operators of brands like Burger King, Popeyes, McDonald’s, and Wendy’s have faced financial difficulties with some filing for Chapter 11 bankruptcy. Contributing factors include rising labor and ingredient costs, stagnant foot traffic, and high interest rates.

Moreover, the shift away from city centers due to remote work has impacted sales, especially for locations reliant on office workers and downtown traffic. Despite these obstacles, large MUOs continue to pursue growth. For example, Tacala LLC, the largest Taco Bell franchisee, recently secured a major investment led by Altamont Capital Partners and other partners, providing the capital needed for further expansion in both the Taco Bell system and new ventures like 7 Brew Drive-thru Coffee stands.

These trends illustrate a franchising market in transition. With a greater concentration of multi-unit operators and a rising pace of ownership transfers, the industry is evolving toward a structure favoring scale and consolidation. While economic pressures persist, large operators remain focused on growth, showcasing resilience and adaptability as they navigate an ever-changing landscape.

Ambika Oberoi is director of information management at FRANdata.

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