The New “Franchise 500®” is Out – Valuable Information for Franchisors and Franchisees

Chuck Modell January 8th, 2019

The January-February 2019 issue of Entrepreneur magazine was published this week, featuring the magazine’s 40th annual Franchise 500 listing. The issue contains more than 180 pages on franchising, including many articles of interest for would-be franchisors and franchisees.

The main feature of this issue is the extensive directory that identifies almost 1,100 franchise systems, ranking the top 500 according to Entrepreneur’scriteria. Topping the list is McDonald’s, followed by Dunkin’ (formerly Dunkin’ Donuts), and Sonic Drive-In. The top-rated non-food system was The UPS Store at number 5.

Of interest to would-be franchisors are the extensive charts that show the number of franchise outlets in each of the listed systems, and the approximate start-up costs, franchise fees, royalties, and selected additional information. (Take some of this information with a grain of salt, as most franchisors have other fees that are not included in this list.)

Another story that would-be franchisors should read is the one entitled “How These 6 Franchises Have Thrived For Decades,” which talks about six brands that have been listed in the Franchise 500 for at least 38 of the 40 years the Franchise 500 has been published – Dairy Queen, Lawn Doctor, Baskin-Robbins, Subway, Chem-Dry, and Ziebart. The article discusses some of the reasons for the success and longevity of these brands.

Startup franchisors will take comfort in knowing that most franchise systems listed in the Franchise 500 have been franchising for less time than one would think. Of the top 10 franchise systems listed, five started franchising before 1980 and the other five started franchising after 1980. Of the franchise systems listed in the Franchise 500, only 86 started franchising before 1980, with 22 of the 500 having started to franchise their business less than five years ago.

Prospective franchisees should also find this issue of interest, as the Franchise 500 tables provide a basic comparison of franchise systems, broken down by type of business. There is also an article entitled “Five Ways to Finance a Franchise” that discusses different ways franchisees have financed their investment, with pros and cons to each, and an article entitled “Which Franchise is Right For You? Follow These Steps” that advises prospective franchisees “how to narrow the field to boost your chances of success.”