FRANCHISE MARKET REPORT OVERVIEW

The size of the global franchise market was projected to be USD 133 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 9.73% from 2025 to 2033, reaching USD 307 billion.

Franchising has become more and more popular among entrepreneurs who want to start their own businesses. This business model offers a unique opportunity to own and manage an existing firm with a proven track record of success. A franchise connection is between a person or organization (the franchisee) who wants to use a trademark, brand, or business model to run a business and the owner of those items (the franchisor). Franchise businesses can be found in a wide range of industries, such as retail, food and beverage, health and wellness, and many more.

Product distribution franchises: The franchisor provides the franchisee with products, which the franchisee subsequently sells to consumers. Franchises that sell beverages, household items, and auto parts are examples of businesses that distribute goods. Franchises that follow a business model: In these kinds of franchises, the franchisor not only supplies the goods but also the entire business system, including marketing, staff development, and ongoing assistance. This enables the franchisee to run the company using the franchisor's recognized operating procedures and brand. Retail outlets and fast food businesses are typical examples of franchised business models.

Manufacturing Franchises: In a manufacturing franchise, products are produced by the franchisor's guidelines. The franchisee runs a manufacturing business and uses the franchisor's procedures and brand name to create the goods. Franchises that have already been in operation and have decided to transition to a franchise system are known as conversion franchises. While the existing brand and marketing techniques assist the franchisee, the franchisor offers the business a tried-and-true structure and support.

COVID-19 IMPACT

Lockdowns And Social Distancing Measures Hampered The Market Growth

In comparison to pre-pandemic levels, the market is seeing higher-than-expected demand in all regions because to the unprecedented and disastrous global COVID-19 pandemic. The franchise market's expansion and demand reaching pre-pandemic levels when the pandemic is finished are the reasons for the abrupt increase in CAGR.

This market has been greatly damaged by the COVID-19 pandemic. Many franchise businesses, particularly those in the food and beverage industry, were compelled to temporarily close or operate at reduced capacity as a result of lockdowns and other social distancing tactics. As a result, their income and profitability have decreased. However, the outbreak also highlighted how flexible and resilient the franchise model is. These businesses fared better during the crisis because they swiftly modified their business plans to incorporate delivery, takeout, or internet services. Their adaptability allowed them to continue serving clients and earning revenue even in the most trying circumstances. The epidemic has also opened up new opportunities for growth in this industry.

LATEST TRENDS

Rise Of Eco-Friendly And Sustainable Franchises Fuels Boosts Market Expansion

Expanding eco-friendly and sustainable franchises is one of the newest trends in this industry. As consumers become more conscious of environmental issues, they actively look for companies that prioritize sustainability. Franchises emphasizing environmentally beneficial behaviors, such as utilizing renewable energy, minimizing waste, and providing environmentally friendly goods, are becoming increasingly well-liked. The growth of multinational franchises is an additional new trend. As economies worldwide become more interconnected due to globalization, more franchisors are eager to expand their operations into new markets. This enables them to capitalize on their global brand recognition and the expanding middle class in new nations. This market is being significantly shaped by technology as well.

FRANCHISE MARKET SEGMENTATION

By Type

The franchise market can be segmented into business format franchise, product distribution franchise, management franchise, and others. Among these, the business format franchise is projected to experience rapid growth through 2033.

By Application

The market can be divided based on application into food franchises, hotel franchises, convenience store franchises, real estate franchises, car rental & dealer franchises, child education franchises, and others. Food franchises are expected to hold the most franchise market share in the upcoming years.

DRIVING FACTORS

Established Brand And Business System Propels Market Expansion

The appeal of an established brand and business structure is one of the major driving forces in this sector. They profit from the goodwill and brand awareness of the franchisor, which attracts clients and fosters loyalty. The franchisor's tried-and-true business model offers franchisees a success roadmap, including standardized procedures, marketing plans, and ongoing assistance.

Reduced Risk And Support Fuels Market Growth

Another motivating reason is the lower risk involved with opening a franchise instead of starting a brand-new company from scratch. They benefit from working with a reputable brand and tried-and-true business model, which boosts their chances of success. Additionally, franchisors offer assistance in some areas, including operations, marketing, and training, which enables them to overcome obstacles and reach profitability more quickly.

RESTRAINING FACTOR

High Initial Investment, Strict Operating Guidelines, And Limited Flexibility Hinder Market Growth

The cost of a franchise opportunity is frequently very high. This covers franchise fees, capital expenditures, and recurring royalties. The initial investment may be a hurdle for those with little financial resources. They are required to abide by the franchisor's operating requirements. While this guarantees uniformity and high quality across all franchise sites, it may restrict the franchisee's freedom to take independent actions or implement novel ideas. The terms and conditions established by the franchisor are binding on franchisees. This covers limitations on pricing, product lines, and promotional tactics. Compared to independent business owners with total control over their operations, franchisees have less freedom.

FRANCHISE MARKET REGIONAL INSIGHTS

U.S. To Dominate Market Due To Established Brand And Business System

The U.S. holds the franchise market share, and factors driving the market growth in this region include the established brand and business system. The allure of a well-known brand and operating system is one of the primary driving forces in this market. The reputation and recognition of the franchisor's brand, which aids in generating business and fostering client confidence, benefit franchisees. With standardized procedures, marketing plans, and continuing assistance, the franchisor's tested business structure offers franchisees a road map for success.

Europe holds the second-largest market share due to reduced risk and support. The motivating aspect is the lower risk of opening a franchise than opening a brand-new company from scratch. Franchisees benefit from using a well-known brand and tested business model, which boosts their likelihood of success. These owners can manage obstacles and reach profitability more quickly because of franchisors’ support in many areas, including operations, marketing, and training.

KEY INDUSTRY PLAYERS

Key Players Focus on Partnerships to Gain a Competitive Advantage

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Top Franchise Companies

• 7-Eleven (U.S.)
• SUBWAY (U.S.)
• Circle K (United States or U.S.)
• Marriott International (U.S.)
• Burger King (U.S.)
• Hilton Hotels & Resorts (U.S.)
• Wendy's (U.S.)
• Pizza Hut (U.S.)
• Dunkin' (U.S.)
• Choice Hotels (U.S.)
• Chem-Dry Carpet Cleaning (U.S.)
• Century 21 (U.S.)
• McDonald's (U.S.)
• Baskin-Robbins (U.S.)
• Taco Bell (U.S.)
• Kumon (Japan)
• InterContinental Hotels and Resorts (U.K.)
• Domino's (U.S.)
• Hertz (U.S.)
• KFC (U.S.)

REPORT COVERAGE

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting factors like segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.