154 /ENTREPRENEUR.COM/January-February 2018
Understanding
the ranking
W
elcome to Entrepreneur’s 39th annual
Franchise 500®.
That’s right, we’ve been putting together the
world’s first, best, and most comprehensive
franchise ranking for almost four decades. And
this year’s turned out to be one of our most
competitive ever. In fact, for the first time in 25 years, more
than 1,000 companies applied to be a part of the list. That
means if you’re interested in buying a franchise, you’ve got
more options than ever, from the established industries still
dominating the top of the rankings, like restaurants, hair
care, and real estate, to emerging trends quickly climbing
their way up, like smartphone repairs, trampoline parks, and
paint-and-sip studios.
So how do we determine which companies come out on
top? Using our proprietary ranking formula, which is always
evolving to keep up with the ever-changing franchise world.
Here’s a quick overview of what we consider:
COSTS & FEES
- Franchise fee
- To t a l i n v e s t m e n t
- Royalty fees
SIZE & GROWTH
- Open and
operating units - Growth rate
- Closures
SUPPORT
- Tr a i n i n g t i m e s
- Marketing
support - Operational
support - Franchisor
infrastructure - Financing
availability - Litigation
BRAND
STRENGTH- Social media
- System size
- Yearsinbusiness
- Years franchising
FINANCIAL
STRENGTH &
STABILITY- Franchisor’s
audited financial
statements
BEFORE WE CAN DETERMINE the rankings, though, we have to
gather the data. Beginning in July 2017, we asked franchi-
sors to fill out our online form and submit a copy of their
current Franchise Disclosure Document (FDD) or Canadian
Disclosure Document. A total of 1,023 companies supplied
the required information. Submissions were then vetted by
our editorial team before being entered for data analysis.
To be eligible, a franchisor must be seeking new franchi-
sees in the U.S. or Canada and must have had a minimum of
10 units open and operating as of July 31, 2017, with at least
one franchise located in North America. Companies in
Chapter 11 bankruptcy proceedings were not eligible. Then,
each eligible franchisor was scored based on more than
150 data points, and those with the highest cumulative
scores became the Franchise 500.
Companies are listed on the following pages by their indus-
try categories. Ranked companies appear with their position
listed to the left of their names. As an additional tool, we
also list the 523 franchise companies that did not rank in the
Franchise 500 but still passed our vetting process. Look for
them listed in alphabetical order under “Not ranked” in their
respective categories.
Use the Index on pg. 219 to find a specific company, or go to
Entrepreneur.com/franchise500 to view the entire list online.
Note: The Franchise 500 is not intended to endorse, ad-
vertise, or recommend any particular franchise. It is solely a
tool to compare franchise operations. Entrepreneur Media
stresses that you should always conduct your own inde-
pendent investigation 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. To protect yourself, do
your homework.
Research compiled by Tracy Stapp Herold and Michael
Frazier, with assistance from J.R. Jimenez, Sean Strain, and
Jesus Delgado; technical assistance from Angel Cool.
T E F PI R OF T E F NCH SE 5 0
Some key factors that go into our evaluation.
TURN PAGE FOR LISTINGS KEY