Today, business experts recognize franchising as one of the most popular types of business paradigms in the United States. Virtually every city includes a multitude of companies employing this enterprise plan. Whether you market fast food, conduct educational programs, or manage a cell phone repair franchise, you’ve likely already discovered competitors in your local area who utilize franchise models.

A Fascinating New Study

Yet even in the USA, some cities maintain a higher percentage of franchises than others. A national financial firm, Lending Tree, recently published a report detailing this situation. The company evaluated data collected during a United States Census Bureau poll of entrepreneurs. The surprising results suggest franchises occur more frequently in specific regions.

The survey revealed just over one out of every twenty companies in cities in the United States relies upon a franchise model. This type of business accounts for 5.4% of commercial enterprises in the nation, in fact. In many cities, franchised companies surpassed non-franchised firms in terms of both payroll size and employee numbers.

A Regional Breakdown

Texas led the way in serving as a location for the most business franchises per capita. Tennessee followed closely behind. Five cities ranked the highest in terms of their franchise rates: San Antonio, Nashville, Dallas, Houston, and Memphis. All of the top five urban areas stood in Texas or Tennessee.

Surprisingly perhaps, San Francisco, New York, and Miami all ranked at the bottom of the franchise rate list. These cities maintained a per capita franchise rate of only 3.7% or lower. This finding proves consistent with a trend noted in the report. Apparently, communities situated in coastal areas tend to display lower franchise rates than more inwardly located sites (with the exception of Houston, of course).

What Explains Regional Franchise Rate Differences?

The Lending Tree report did not detail the basis (if any) for regional differences in franchise rates in the United States. Its findings do furnish interesting material for future research, however. In both Texas and Tennessee, franchise rates approached double the national average.

Some companies conducting franchising activities may find it useful to delve into the statistics underlying the report in greater depth. While numerous franchises exist in all of the leading urban centers included within the survey, determining the basis for regional differences in franchise activity might prove interesting. This subject will certainly intrigue many entrepreneurs!