Franchise in the USA: Visas and Strategies for Investors

Investing in a franchise in the United States is a strategy that combines the predictability of a proven business model with the goal of establishing a business presence in the country. For foreign entrepreneurs, this decision goes beyond commercial analysis: purchasing a franchise can be directly connected to immigration planning, serving as a basis for visa categories that require active investment and hands-on management of a business.

The American franchise market has more than 800,000 franchised units in operation, led by sectors such as food, cleaning services, fitness, and health. For the foreign investor, understanding how this model works, what costs are involved, and how it fits into immigration requirements is the first step toward an informed decision.

How Franchising Works

A franchise is a commercial contract in which the franchisor grants the franchisee the right to operate under its brand, using its processes, products, and operating system. In return, the franchisee pays an initial franchise fee and ongoing royalties on revenue. The franchisee is the legal owner of the unit but must strictly follow the operational standards set by the franchisor.

In the United States, every franchise is regulated by the Federal Trade Commission (FTC), which requires the delivery of the Franchise Disclosure Document (FDD) to the prospective franchisee at least 14 days before signing any contract or making any payment. The FDD contains 23 mandatory items, including litigation history, audited financial statements, a complete list of current and former franchisees, and detailed estimates of the initial investment.

Advantages for Foreigners

For those coming from another country and not deeply familiar with the American market, franchising offers relevant practical advantages:

• Established brand: the franchisee starts operating with brand recognition that would take years to build from scratch, making it easier to attract customers from day one
• Proven operational model: the franchisor provides operation manuals, intensive training, and ongoing support in management, marketing, and technology
• Supplier network: supplier contracts are already established, eliminating one of the biggest challenges for new entrepreneurs in the country
• Available financial data: the FDD allows for an accurate assessment of the required investment and expected profitability before any financial commitment

Risks and Limitations

The franchise model also imposes important restrictions that the foreign investor should consider before moving forward:

• High costs: in addition to the franchise fee (which can range from $20,000 to $500,000 depending on the network), there are construction, inventory, equipment, and working capital costs. The total investment can exceed $1 million in larger networks
• Ongoing royalties and fees: most franchises charge between 4% and 8% of gross revenue as royalties, plus 1% to 3% for marketing funds, directly impacting profit margins
• Limited autonomy: the franchisee does not have the freedom to change the menu, layout, suppliers, or marketing strategy. This rigidity can frustrate entrepreneurs used to total operational independence
• Risk of closure: although franchises have slightly better survival rates than independent businesses, they are not a guarantee of success. Performance depends on location, management, and market conditions

Connection with Visas

Owning and actively managing a franchise in the US can support different immigration strategies. Each visa category has specific requirements that must be carefully evaluated according to the investor’s profile.

E-2 Visa

The E-2 Treaty Investor is the visa most associated with franchises. It requires the investor to be a citizen of a country with a treaty of commerce and navigation with the US. There is no fixed minimum investment amount; the requirement is that the investment be substantial in relation to the total cost of the business. In practice, investments between $80,000 and $300,000 are common in approved cases, but USCIS evaluates each case individually using the proportionality test. The E-2 is a non-immigrant visa, renewable indefinitely as long as the business remains active. Brazil does not have an E-2 treaty with the US, which eliminates this option for Brazilians, except for those with dual citizenship from an eligible country such as Italy, Portugal, or Japan.

L-1 Visa

The L-1 Intracompany Transferee applies when the investor already owns a company in their home country and wishes to expand to the US through a franchise. The beneficiary must have worked at the foreign company for at least one of the last three years in a managerial, executive, or specialized knowledge position. The US company can be a branch, subsidiary, or affiliate of the original company.

EB-5 Visa

The EB-5 Immigrant Investor is a green card category that requires a minimum investment of $1,050,000 in general businesses, or $800,000 in targeted employment areas (TEA), including rural areas and regions of high unemployment. In addition to the investment, the business must create or preserve at least 10 full-time jobs for American workers. The EB-5 is the highest investment option but offers direct permanent residency. Investors in rural TEA projects may benefit from priority processing and reserved visas.

What USCIS Evaluates

Regardless of the visa category, USCIS checks the legitimacy of the business, the lawful source of invested funds, and the investor’s active role in management. For the E-2, the business cannot be marginal, meaning it must have the present or future capacity to generate income beyond the minimum necessary for the investor and their family’s survival. For the EB-5, job creation must be demonstrated with a comprehensive and credible business plan.

Purchasing a franchise does not guarantee, by itself, the approval of any visa. The decision depends on a holistic analysis of the case, including the investor’s profile, business viability, financial documentation, and compliance with all regulatory requirements of the intended category. Careful planning and a detailed understanding of each category’s requirements are essential before making significant financial commitments.

Victoria Harper

Editor-in-Chief

Meet the author

Leading journalism and editorial content at Visto n’ Visa, Victoria helps make immigration topics clear, trustworthy, and easy to understand. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.