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By the Numbers: The Census Report on Franchises

A first-time review by the U.S. Census Bureau dissects franchising, one stat at a time.

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Quick, did you know that nearly half of the optical stores in the United States are affiliated with franchises? Or that there isn't a single franchise company that sells luggage and leather goods?

Probably not. Actually, few knew until last fall, when the U.S. Census Bureau issued its first Economic Census Franchise Report. In 2007, when the Census Bureau surveyed 4.3 million businesses that have paid employees, its forms included questions about franchising for the first time. The results, which were released in September 2010, show that franchises account for 10.5 percent of all businesses and support 7.9 million workers in a work force of 59 million. Franchising sales account for nearly $1.3 trillion of $7.7 trillion in total sales.

The numbers came as no surprise to the International Franchise Association in Washington, D.C., says spokeswoman Alisa Harrison, because they closely match information gathered by accounting firm Pricewaterhouse-Coopers for the IFA's annual Economic Impact of Franchising reports.

"What did surprise us," Harrison says, "was that franchises appear in 295 different industries."

Franchising dominates several obvious industries, such as fast-food restaurants (59 percent) and hotels (47 percent). But it is barely present in others, such as musical instruments and supplies (1 percent) and driving schools (.04 percent).

The report, Harrison says, "gives us better information to present to policymakers when lobbying for issues related to our franchise community." It can also be a useful research tool for IFA members and for groups thinking of launching a franchised business. The IFA has allocated funds from its 2011 budget to hire a researcher to analyze the information and make it more user-friendly, she adds.

The Census Bureau conducts a business census every five years. The IFA is working with the bureau for the 2012 survey to include questions for businesses that do not have paid employees, such as sole proprietor accounting franchises. Owners of real estate franchises, Harrison says, might also fit into that category because their agents are independent contractors.

To find data from the report, go to the IFA's website, franchise.org, and type "2007 Economic Census Franchise Report" into the search engine.

Julie Bennett is a freelance writer.

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This article was originally published in the January 2011 print edition of Entrepreneur with the headline: By the Numbers.

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