Franchise business formation hit a record high in 2025 and is on pace to exceed it in 2026. The International Franchise Association reports that more than 800,000 franchise units are now operating across the US, supporting 8.7 million jobs. The fastest-growing segments include fitness studios, home services, senior care, and fast casual dining concepts adapted for smaller footprints and lower startup costs.
The appeal is understandable from a risk perspective. Franchise businesses have historically shown lower failure rates than independent startups, benefiting from established brand recognition, proven operational systems, and franchisor support. The tradeoff is limited creative control and ongoing royalty obligations. Many new franchise operators are career-changers using early retirement packages or severance funds to invest in businesses they can operate with family members.
