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The 'real story' on failure rates?

For years, franchisers trumpeted about how franchise businesses enjoyed a greater degree of success than independent businesses.

Some still do, although that contention has been largely disproved.

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The International Franchise Association maintains that no reliable data comparing success and failure rates for franchise units versus independents exists. "It would be impossible to do," says a spokesman for the organization. "Given franchising's scope, there are just too many unlike entities to compare."

But Timothy Bates, a professor of economics at Wayne State University, in Detroit, has conducted research he says shows a greater success rate among independents than among franchises. Using Census Bureau data, he found a 62 percent survival rate among franchise businesses after five years, versus a 68 percent rate among independent start-ups.

(c) Copyright 2000. The Christian Science Publishing Society