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What are good stats about the rate of survival/failure of franchises?

I get to hear that McDonald's restaurants tend to live longer than Subway's, but don't know how reliable that is. Around me, I have seen both a Subway and a McDonald's closing their doors after running for some time. The investment and other requirements for a McDonald's are much higher, so maybe this compensates for the smaller risk, making both investments the same.

Quora Feans
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    I'm voting to close this question as off-topic because this is about franchise success rates, not about personal finance. – ChrisInEdmonton Aug 26 '19 at 14:32
  • @ChrisInEdmonton: well, for investing your personal savings in a franchise, it's fair to ask about success rate, isn't it? – Quora Feans Aug 26 '19 at 15:46
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    Regarding the restaurants that closed. You don't know for sure that they failed. Maybe they moved to another location when their lease was up, or they just decided that running a business was too much work. – Mattman944 Aug 26 '19 at 15:59

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I would argue that you're only considering one of many variables (the brand) in the survivability of a franchise. I would also consider these variables critical if you're thinking of starting a franchise:

  • Location
  • Competition
  • Financial health - how much do you need to borrow to operate? How much margin do you need?
  • Local market - how many people will want to buy your product
  • Operational skill - can you provide good service and run the business efficiently?

As you say, you've seen both die in one area, but both have thousands of locations worldwide, so it's hard to predict how a franchise will do in a specific location with a specific owner/manager.

D Stanley
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