About the Franchise 500®
Understanding the ranking
There’s a lot that goes into putting together the first, best and most comprehensive franchise ranking in the world. Here’s a behind-the-scenes look at Entrepreneur’s 36th annual Franchise 500®.The process began in July 2014, when we asked franchisors to participate in our survey. Each submission was vetted before being entered for data analysis; 927 companies made the first cut. Of those, the top 500 made the Franchise 500® ranking, based on financial and statistical data from July 2012 through July 2014. Only franchise companies that supply a full Franchise Disclosure Document (FDD) or Canadian Disclosure Document and whose information is verified by Entrepreneur can receive a listing. To be eligible for the Franchise 500®, a franchisor must have a minimum of 10 units, with at least one franchise located in the U.S. The company must be seeking new franchisees in the U.S., and it cannot be in Chapter 11 at the time the ranking is compiled. (The exception to these rules is Canada-based companies that are expanding only in Canada.) All companies, regardless of size, are judged by the same criteria: objective, quantifiable measures of a franchise operation. The most important factors include financial strength and stability, growth rate and size of the system. We also consider the number of years a company has been in business and the length of time it’s been franchising, startup costs, litigation, percentage of terminations and whether the company provides financing. Financial data is analyzed by an independent CPA. We do not measure subjective elements such as franchisee satisfaction or management style. The objective factors are plugged into our exclusive Franchise 500® formula, with each eligible company receiving a cumulative score. Franchise companies are listed according to industry categories. Ranked companies are shown with their rank listed to the left of their names. As an additional research tool, we list franchise companies that are not ranked in the Franchise 500®. These companies are listed in alphabetical order under the “Not Ranked” heading within each category. If you’re searching for a specific company, check the Index, which starts on page 246. The full ranking in numerical order can be viewed online at Entrepreneur.com/franchise500. The Franchise 500® is not intended to endorse, advertise or recommend any particular franchise. 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 investing money in a franchise. Read the FDD and related materials carefully, get help from a franchise attorney and a CPA in reviewing any legal or financial documents, and talk to as many existing and former franchisees as possible and visit their outlets. The best way to protect yourself is to do your homework. Research compiled by Tracy Stapp Herold with assistance from Robert Duggins, J.R. Jimenez, Giuseppe Ricapito, Monica Santana and Maria Shockley; technical assistance from Daniel Sibitzky; financial analysis by David R. Juedes, CPA; graphic design by Megan Roy and Nancy Roy.
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