2024 Franchise 500 Ranking - Page 7

This year marks the 45th annual Franchise 500—still the world’s first, best, and most comprehensive franchise ranking. If you’re looking to buy a franchise, this is your definitive guide. If you’re a franchisor, this is where your hard work is recognized.

When Entrepreneur published the first version of this ranking back in 1980, the future of the franchise industry seemed debatable. The model had blossomed in the 1950s and ’60s; McDonald’s began franchising in 1955, for example. But what would happen in the dawning computer age and the 1980s economic turmoil? Now we know the answer: Franchising thrived, and only continues to. More and more franchise companies apply to the Franchise 500 every year, proving that founders still see franchising as one of the best ways to grow their brands—and entrepreneurs still see it as one of the best ways to get in business for themselves, but not by themselves. Some franchise categories from 1980 may no longer exist (farewell, movie rental chains), but new categories have emerged in areas that weren’t imaginable 45 years ago—such as mental health services, coworking spaces, and boba tea. No matter what type of business interests you, you’re likely to find ample opportunity in our list.

But how do we go about evaluating and ranking these opportunities? Read on to find out. When Entrepreneur published the very first version of this ranking back in 1980, no one could have known what it would become—or what the future of the franchise industry would be. All these years later, we continue to see more and more franchise companies apply every year, proving that founders still see franchising as one of the best ways to grow their brands, and entrepreneurs still see it as one of the best ways to get in business for themselves, but not by themselves. We also continue to see franchise brands emerge in categories that never would have been imagined 45 years ago, such as mental health services, coworking spaces, and boba tea. So no matter what type of business interests you, you’re likely to find ample opportunity in our list. But how do go about evaluating and ranking all of these opportunities? Read on to find out.

The Five Pillars of the Franchise 500^®

Some key factors that go into our evaluation:

Note: Pillars are not listed in order of importance or weighting.

The first step in our ranking process is gathering the data. Starting in June 2023, we asked franchisors to fill out our extensive online form and submit a copy of their current Franchise Disclosure Document (FDD) or Canadian Disclosure Document. A record-setting 1,389 companies supplied all the required information. Each submissions was vetted by our editorial team before being entered for data analysis.

To be eligible to rank, a franchisor must be seeking new franchisees in the U.S. or Canada and must have had a minimum of 10 units open and operating as of July 31, 2023, with at least one franchise located in North America. Each eligible franchi­sor was scored based on more than 150 data points, and those with the highest cumulative scores became this year’s Franchise 500.

Note: The Franchise 500 is not intended to endorse, adver­tise, or recommend any particular franchise. It is solely a tool to compare franchise operations. You should always conduct your own careful research before investing in a franchise. Read the FDD and related materials, get help from a fran­chise attorney and an accountant to review legal and financial documents, talk to as many existing and former franchisees as possible, and visit their outlets. Protect yourself by doing your homework to find the opportunity that’s best for you.

Research compiled by Tracy Stapp Herold, Jordan Hall, and Michael Frazier, with assistance from Sean Strain, Brianna Hayden, Jennifer Natale, and Andrew Robinson; technical assistance from Michael Flach and Angel Cool.