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Entrepreneur's 24th Annual Franchise 500

A closer look at this year's ranking of the top 500 franchises
January 1, 2003
URL: http://www.entrepreneur.com/article/58208

Thousands of prospective entrepreneurs seeking stability in unstable times have turned to franchising, making this old standby a new economic star. What's the allure? Generally, franchising offers the perks of a corporation, minus the scandal, and the freedom of entrepreneurship, minus much of the risk. If you believe 2003 is your year to buy a franchise, Entrepreneur's 24th Annual Franchise 500® is a great place to start your search.

The initial Franchise 500® in 1980 was the first ranking of franchises in the industry. Over the years, we have polished and perfected our ranking procedure, giving us a formula that accurately identifies today's top franchise opportunities for you.

Only franchise companies that submitted full Uniform Franchise Offering Circulars (UFOCs) or Alberta, Canada, disclosure documents were eligible to receive a listing in the magazine. And only those companies that have a U.S. or Alberta, Canada, disclosure document and whose information Entrepreneur verified from the disclosure documents are eligible to be ranked--giving us the top 500 franchises.

We consider numerous factors in our ranking, some of which are weighed more heavily than others. The most important ones include financial strength and stability, growth rate and size of the system. We also consider the number of years in business and length of time franchising, start-up costs, litigation, percentage of terminations and whether the company provides financing. Financial data was audited by an independent CPA firm. Every company with verifiable data receives a cumulative score. The franchises with the highest "cumes" become the Franchise 500®.

These factors are objective, quantifiable measures of a franchise operation. We do not measure subjective elements such as franchisee satisfaction or management style, because these are judgments only you can make based on your own needs and experiences. All companies, regardless of size, are judged by the same criteria.

Remember that the Franchise 500® is not intended to endorse, advertise or recommend any particular franchise(s). It is solely a research tool you can use to compare franchise operations. Entrepreneur stresses that you should always conduct your own independent investigation before you invest money in a franchise. Read the UFOC and related materials carefully; get help from an attorney and CPA in reviewing any legal documents; talk to as many existing franchisees as possible and visit their outlets. The best way to protect yourself is to do your homework.

View the top franchises in our 24th Annual Franchise 500 now.

Research compiled by Maria Anton Conley, Maggie Iskander and Zoy Parkinson-Smith; financial analysis by David R. Juedes, CPA; additional assistance from Steve Cooper, April Y. Pennington, Katie Boyle and Sara Wilson.