2009 Franchise 500 Top 10
Read up on this year's franchise power players.
After dedicating the past several months to painstakingly calling, e-mailing, researching and analyzing hundreds of franchise companies--not to mention the three decades we've spent perfecting out ranking procedure and top-secret formula--we're proud to present Entrepreneur's 30th Annual Franchise 500, the world's first, best and most comprehensive franchise ranking.
Illustration - Alan Kitching/debutart.com
With an initial $1,000 investment, 17-year-old Fred DeLuca and family friend Peter Buck opened Pete's Super Submarines in 1965. The duo changed the name to Subway a few years later and began franchising in 1974. Fast-forward 43 years, and the Bridgeport, Connecticut, sandwich shop has become the world's largest submarine sandwich chain, boasting more than 28,000 restaurants in 86 countries.
Number of franchises: 29,612
Franchising since: 1974
Startup costs: $78,600 to $238,300
2008 rank: #2
At the age of 52, Ray Kroc pitched the idea of opening several quick-service restaurants to brothers Dick and Mac McDonald, owners of the McDonald's hamburger stand in San Bernardino, California. With their approval, Kroc opened the first restaurant/franchise in Des Plaines, Illinois, in 1955. Now the global food-service retailer has around 30,000 restaurants in more than 100 countries.
Number of franchises: 24,799
Franchising since: 1955
Startup costs: $950,200 to $1.8 million
2008 rank: #5
#3: Liberty Tax Service
In 1997, after selling Jackson Hewitt Inc.--the tax-preparation service company he founded 15 years earlier--John Hewitt acquired a Canadian tax franchisor and established Liberty Tax Service. A year later, Hewitt expanded into the U.S. with five offices; at the close of 2008, the number of U.S.-based Liberty Tax Service franchises had grown to nearly 2,500.
Number of franchises: 2,579
Franchising since: 1973
Startup costs: $53,800 to $66,900
2008 rank: #23
#4: Sonic Drive-In
In 1953, Troy Smith purchased "Top Hat," a root beer stand in Shawnee, Oklahoma, where customers would park, buy food and eat in their cars. He expanded that concept into a restaurant with partner Charles Pappe, introducing the "Sonic" name in 1959. Today, the $3 billion company operates more than 3,000 drive-ins in the U.S. and Mexico.
Number of franchises: 2,678
Franchising since: 1959
Startup costs: $1.2 million to 3.2 million
2008 rank: #6
#5: InterContinental Hotels GroupIn 1988, U.K.-based Bass Brewers (founded by William Bass in 1777) moved into the hospitality industry with the purchase of Holiday Inns International. The company focused on expanding its hotel properties and finally sold the brewery business off in 2000. The InterContinental Hotels Group now owns seven brands and operates more than 4,000 hotels spanning nearly 100 countries.
Number of franchises: 3,498
Franchising since: 1954
Startup costs: Varies
2008 rank: #8
#6: Ace Hardware
Ace Hardware began in 1924, when Richard Hesse banded together with other Chicago-area hardware retailers to increase their collective buying power and profits. The company was incorporated in 1928, and 80 years later has evolved into one of the largest hardware cooperatives in the world, with more than 4,600 stores in seven countries.
Number of franchises: 4,693
Franchising since: 1976
Startup costs: $243,500 to $1 million
2008 rank: #12 Franchise details
#7: Pizza Hut
While college students in Wichita, Kansas, Frank and Dan Carney were inspired to open a pizza parlor. So the brothers borrowed $600 from their mother and opened the first Pizza Hut in 1958. Now there are approximately 6,200 locations in the U.S. and more than 4,000 restaurants in 100 countries.
Number of franchises: 10,239
Franchising since: 1959
Startup costs: $638,000 to 2.97 million
2008 rank: #4
#8: The UPS Store/Mail Boxes Etc.Herb Goffstein and Pat and Mimi Senn founded Mail Boxes Etc. as an alternative to the U.S. Postal Service in 1980, and opened their first store in Carlsbad, California. In 2001, Mail Boxes Etc. became a subsidiary of The UPS Store and now runs a network of almost 6,000 franchises located in the U.S. and more than 40 other countries.
Number of franchises: 5,982
Franchising since: 1980
Startup costs: $171,200 to $280,000
2008 rank: #11
#9: Circle K
Circle K's roots go back to 1951, when Fred Hervey purchased three Kay's Food Stores in El Paso, Texas. Hervey expanded the retail network over the next few decades and entered the international market in 1979. A franchise program was introduced in 1999, and now more than 6,000 Circle K sites operate around the world.
Number of franchises: 4,085
Franchising since: 1995
Startup costs: $161,000 to $1.4 million
2008 rank: #17
#10: Papa John's
In 1984, John Schnatter knocked out a broom closet in the back of his father's tavern and began selling his pizzas to the tavern's customers. Due to their popularity, he was able to expand into an adjoining space and open the first Papa John's restaurant in 1985. Today, there are more than 3,000 Papa John's restaurants worldwide.
Number of franchises: 2,615
Franchising since: 1986
Startup costs: $135,800 to $491,600
2008 rank: #36