Illustration: Eniola Odetunde/Axios

Familiar chains that look like giant corporations are often independently owned small businesses that are getting wrecked by the pandemic alongside local mom-and-pops.

The big picture: Franchising has exploded in recent decades, with 733,000 franchise establishments employing more than 7.6 million Americans. The coronavirus closed 74% of them, according to a survey by the International Franchise Association.

Be smart: Fewer than half of all franchises are restaurants. The rest are in sectors like home health care, business services, hotels, auto repair, child care, dry cleaning, gyms, salons and spas.

  • They pay a one-time fee — usually tens of thousands of dollars — to buy a franchise, then give a percentage of their sales to the parent company in exchange for national advertising support and the right to use their brand and processes.
  • The franchisee is responsible for day-to-day operations, including staffing.

What they're saying: “We like to think that franchisees have these huge war chests of money, but they’re boot-strapping it. They’re small businesses that don’t have a lot of money,” Jania Bailey, CEO of franchise consultant group FranNet, told Restaurant Dive.

  • “Many [franchisees] will put everything on the line — they do a 401(k) rollover, they invest their retirement fund, take second mortgages on their homes — anything and everything to get that business open. And they scrape together to get it up and operational and get cash flowing positive, and they’re starting to see a little bit of profit, and then something like this happens and it just wipes them out.”

Go deeper

Kendall Baker, author of Sports
43 mins ago - Sports

Locker Room wants to reinvent how fans talk sports

Courtesy: Betty Labs

Locker Room, a social audio app where fans can talk sports and spontaneously join live conversations, launches Tuesday on the App Store.

The state of play: The company behind Locker Room, Betty Labs, has raised $9.3 million in seed funding led by Google Ventures with participation from Lightspeed Venture Partners, Axios has learned.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Axios-Ipsos poll: Federal response has only gotten worse. The swing states where the pandemic is raging.
  2. Health: The coronavirus is starting to crush some hospitals. 13 states set single-day case records last week.
  3. Business: Where stimulus is needed most.
  4. Education: The dangerous instability of school re-openings.
  5. States: Nearly two dozen Minnesota COVID cases traced to 3 Trump campaign events
  6. World: Unrest in Italy as restrictions grow across Europe.
  7. Media: Fox News president and several hosts advised to quarantine.
Caitlin Owens, author of Vitals
3 hours ago - Health

The coronavirus is starting to crush some hospitals

Illustration: Aïda Amer/Axios

Some states are seeing dangerous levels of coronavirus hospitalizations, with hospitals warning that they could soon become overwhelmed if no action is taken to slow the spread.

Why it matters: Patients can only receive good care if there's enough care to go around — which is one reason why the death rate was so much higher in the spring, some experts say.