It's rare to find something so good, it lasts 25 years. Such
is the case with Entrepreneur's Franchise 500®. In
our 25th Annual Franchise 500®, we provide what franchise
seekers have long come to expect, even anticipate: the world's
first, best and most comprehensive listing of franchises. (To go
directly to the listing and view this year's winners, click
here.)
Franchisors ranked in the Franchise 500® are listed in red.
Rankings are to the left of their names. Companies whose
information was verified by Entrepreneur, but were not
ranked in the top 500, are listed in descending order under those
that received a ranking in the top 500. Companies not eligible to
be ranked-because they're too small (franchises must have a
minimum of 10 units with at least one being a U.S.-based
franchise), are not seeking new franchisees in the United States,
are in Chapter 11, submitted information too late or submitted
incomplete information are listed alphabetically.
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 score become the Franchise 500®.
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These factors are objective, quantifiable measures of a
franchise operation. We do not measure subjective elements such as
franchisee satisfaction or management style, since 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.
The franchisor's growth over the past three years is shown
by the number of both franchised and company-owned units for 2001,
2002 and 2003. Another key column lists the total start-up costs
necessary to open the franchise (including the initial franchise
fee). This figure is affected by real estate and construction costs
(if applicable), inventory, location, type of business and many
other variables. For easy reference, the initial franchise fee is
listed separately. Additional costs such as royalty fees, usually
expressed as a percentage of monthly gross sales, are also listed
separately. The remaining information is self-explanatory. The
category "Where Registered" shows where a franchisor has
either registered to sell or plans to register to this year in
states where it is required (California, Hawaii, Illinois, Indiana,
Maryland, Michigan, Minnesota, New York, North Dakota, Rhode
Island, South Dakota, Virginia, Washington and Wisconsin).
"Available U.S. Regions" and "Seeking Foreign?"
show where franchisors are planning to expand.
Some companies provide financing of their franchise fees or
their total start-up costs, or even offer equipment leasing options
for franchisees. The "Type of Financing" category details
the kind of franchising provided by each franchise company.
We've also noted whether the franchise can be operated from
home and which companies are seeking multiple units only.
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.
| To view our 25th Annual
Franchise 500®, click here. |
Research compiled by Maria Anton Conley, Maggie Iskander and
Zoy Parkinson Smith; financial analysis by David R. Juedes, CPA;
graphic design by Matt Samarin; additional assistance from Tracy
Stapp, Jacqueline Cavanagh, Kellie Cramm, Cassie Kreitner, Mark
Newton, Sara Wilson and Sarah Pierce