How Investing in a Franchise Can Be a Smart Financial Move for Entrepreneurs

Editorial Staff
3 hours ago
4 min read

Every entrepreneur faces a crucial decision before starting a business: build from the ground up, purchase an existing company, or invest in a franchise. Each option has strengths and weaknesses. Independent startups offer flexibility but carry high risk. Buying an existing company can deliver immediate revenue but may involve hidden issues. Franchising offers another path. It combines the financial advantages of a proven system, transparent costs, structured support, and long-term value. For international investors, franchising is also a practical route to qualifying for the E-2 Treaty Investor Visa, since it provides a documented and credible structure for investment.

How Investing in a Franchise Can Be a Smart Financial Move for Entrepreneurs

State of the U.S. franchising industry

Franchising has become one of the most important engines of the American economy. According to the International Franchise Association (IFA), franchise businesses are projected to generate more than $936 billion in output in 2025, an increase of 4.4 percent from 2024. By comparison, total U.S. gross domestic product (GDP) is expected to expand by only 1.9 percent.

The IFA also reports that franchises will contribute $578 billion to GDP in 2025. Beyond revenue, the sector is a major source of employment. Forecasts show that franchise systems will add about 210,000 new jobs this year, raising total franchise employment above 9 million positions.

Franchise operations are also less volatile than independent startups. Research cited by Neighborly Franchise Insights shows that only about 4 percent of franchises close within five years, compared to nearly half of independent small businesses.

In terms of scale, there are roughly 830,000 franchise establishments in the United States, a number expected to reach 851,000 by the end of 2025.

Why Franchising Is a Smart Move for Entrepreneurs

Franchising reduces risk by providing a model with standardized operations, documented systems, and built-in brand recognition. This credibility often translates into faster revenue and stronger customer retention.

Franchisors also supply ongoing support through training, marketing, and operational guidance. Access to financing is often easier, since lenders see franchises as lower-risk investments supported by historical performance data. Understanding what lenders look for when financing a franchise is essential, and resources like this guide on financing your franchise can help entrepreneurs prepare.

Costs are transparent as well. The Franchise Disclosure Document (FDD) outlines fees, royalties, and startup requirements. For investors, this clarity allows accurate budgeting and better capital planning.

Franchises hold stronger resale value. A well-performing location attracts buyers and often commands higher multiples, making it both income source and asset.

Scalability further strengthens the financial case. Once the first unit is profitable, expansion to multiple locations is far more achievable thanks to existing supply chains and brand infrastructure. Multi-unit ownership is a clear path to wealth-building within franchising.

Profitability data supports this potential. According to Franchise Business Review (FBR), the median annual income for franchise owners is about $70,000, and top performers in some systems earn more than $200,000 per year.

Promising Sectors for Franchise Investment

Not every industry within franchising performs at the same level. Certain sectors are positioned for growth as dietary preferences, demographics, health priorities, and family needs create new opportunities.

Food and BeverageAccording to the IFA, retail food, products, and services are projected to be among the fastest-growing segments in 2025, with output expected to rise by 3.5 percent. Consumer demand is moving toward health-conscious menus, fast-casual formats, and specialty items such as coffee and desserts.

Home ServicesFBR Research highlights home services such as cleaning, repair, and landscaping as one of the most attractive sectors for new entrepreneurs, partly because entry costs are often lower compared with restaurants. This sector continues to grow as homeowners spend more on maintenance and improvements.

Health and Wellness / Education and ChildcareThe IFA forecasts personal services, which includes health, fitness, childcare, and education, as the fastest-growing franchise segment in 2025 with an expected growth rate of 4.3 percent. FBR also reports strong demand for health and wellness concepts ranging from gyms to therapy services. Education and childcare franchises, including tutoring centers and early learning, are also expanding as working families seek reliable support.

Conclusion

Franchising continues to prove itself as both a business model and an investment strategy. With predictable costs, strong survival rates, and sectors positioned for growth, it provides entrepreneurs with a way to generate income while building lasting value. For foreign nationals, it also aligns well with the requirements of the E-2 Treaty Investor Visa because it represents a substantial investment in a real, operating enterprise that can create U.S. jobs. Backed by industry scale and transparent financial structures, franchising offers a reliable path for entrepreneurs pursuing both wealth and opportunity in the United States.

Anyone pursuing this path benefits from expert guidance. E2 Visa Franchises offers tailored support to help investors select the right brand, meet E-2 visa requirements, and build a foundation for lasting success.

Author Bio:

Jean-David Cohen is the founder of E2VisaFranchises.com, a franchise consulting firm that helps foreign entrepreneurs identify the right franchise opportunities aligned with the E-2 visa. He also leads ImmigrationBusinessPlan.com a boutique firm focused on investor visa business plans. With 20+ years of experience — and as a former E-2 visa holder himself — Jean-David supports international founders in launching successful U.S. ventures.

Connect: linkedin.com/in/jean-david-cohen

1 International Franchise Association. https://www.franchise.org/2025/02/ifa-2025-economic-outlook-

franchising-outpaces-u-s-economy/

2 International Franchise Association. https://www.franchise.org/2025/02/ifa-2025-economic-outlook-

franchising-outpaces-u-s-economy/

3 International Franchise Association. https://www.franchise.org/2025/02/ifa-salutes-116-franchisees-of-

the-year/

4 Neighborly Franchising. https://franchise.neighborly.com/blog/exploring-franchise-success-rates-and-

what-they-mean-for-entrepreneurs

5 International Franchise Association. https://www.franchise.org/2025/02/ifa-salutes-116-franchisees-of-

the-year/

6 Franchise Business Review. https://franchisebusinessreview.com/post/how-much-franchise-owners-