The 43rd annual Franchise 500 Entrepreneur Ranking was recently released, not only to showcase the most popular brands for entrepreneurs and businessmen, but also to shed light on the challenges and changes that have taken place in this type of business.

About the Franchise 500 Ranking

Stressing on the general resilience of the industry, where many franchisors had to adapt and evolve to stay afloat and even grow in the midst of these difficult times of pandemic and economic recession, this type of investment continues to be attractive as a method of expansion and in the last year a record was set in the number of applicants.

To prepare its definitive list, which includes categories as varied as shipping services, real estate sales, ghost kitchens, gyms, among many others, Entrepreneur applies 5 basic pillars:

1. Costs and Fees

• Franchise fee
• Total investment
• Royalty fees

2. Size and Growth

• Open and operational units
• Growth rate
• Closures

3. Support

• Training times
• Marketing support
• Operational support
• Franchisor infrastructure
• Financing availability
• Litigation

4. Brand Strength

• Social media
• System size
• Years in business
• Franchise years

5. Financial Strength and Stability 

• Franchisor's audited financial statements

As part of their classification process, in which a significant amount of data is collected, since June 2021 franchisors have been asked to complete an online form and submit a copy of their current Franchise Disclosure Document (FDD) or Canadian Document Outreach.

1,177 companies were selected to be studied and classified by the editorial team of Entrepreneur.

Eligibility

To be considered eligible, 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, 2021, with at least one franchise located in North America. Each eligible franchisor was scored based on more than 150 data points, with the highest cumulative scores becoming the Franchise 500.

“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,” stresses Entrepreneur. 

To see the full list, click here.