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who launches a new independent business. Factual underpinnings for this claim were not apparent. At the other end of the journalistic spectrum, the February 1994 issue of magazine claims that percent of Decorating Den39。s franchisees terminated operations during the three year period ending in December 1992. Decorating Den is a franchisor that grew spectacularly during the 1980s。 its franchisees invest between $17,000 and $50,000 to launch their firms. Business failure rate figures disseminated by individual franchisors and the International Franchise Association suggest that 92 percent of franchise business startups are still in business at the end of five years, versus only 23 percent of the independent firms. Such promotional business failure rate figures cite the . Department of Commerce as their source. In fact, the . Department of Commerce has, until recently, conducted annuals surveys of franchisors and published the results in biennial reports, franchising in the economy. According to the staff of the . House of Representatives Committee on Small Business, however, a prehensive review of the franchising in the economy reports fails to show any figures providing parable failure or success rates for franchises or franchisees. On the contrary, the reports note specifically that 39。the number of failures is unknown39。(franchising in the economy, 1988), .My own review of applicable . Department of Commerce publications reveals no studies or statistics capable of supporting parative survival rates for new franchise versus independent business startups. Claims that franchise startups have vastly higher survival rates than independent business startups cannot be supported by published . Department of Commerce studies of small business. Thus, claims about franchise rates of survival have often tended to extremes. The purpose of this study is to raise the debate to a higher plain. The presence Of the CBO data base makes it possible for issues of franchisee survival to be analyzed in objective, prehensive ways. The CBO oversamples minority and women business owners, and it oversamples the larger scale small businesses that utilize paid employees. Of the roughly 90,000 small businesses surveyed to create the CBO data base, over 70 percent responded. All of the reported statistics in this study are weighted to adjust for both survey nonresponsive, and the Census Bureau39。s nonrandom sampling in the creation of the CBO: the firms described in this study are therefore representative of young firms that grossed at least $5000 in total revenues in 1987 .This study covers only firms formed over the 19841987 period and the unit of analysis is firms, not persons. Thus, the universe of firms covered in this study is 4,005,561 small businesses. A description of the CBO sample of young firms analyzed in the following pages appears in the appendix of this study. The sample of franchise firms analyzed here’s not identical with the universe of franchise units opened between 1984 and 1987 for several reasons. First, some franchise units are owned by the franchisor. Second, some new franchise units are owned by multiunit firms that began operations before 1984. Third, multiunit new firms included in this study might own franchise operations at several locations, but such a firm is only counted once, because the unit of analysis here is the firm. Thus, the failure rate for all new franchise units operating in 1987 that opened up between 1984 and 1987 may differ from the closure rate reported in this study. C. Characteristics of franchise and independent young firms Existing studies identify traits that are positively correlated with firm longevity. The