Lists and rankings are always very popular among readers of magazines and blogs. The big kahuna of lists in the franchising world is the Franchise 500, which Entrepreneur Magazine publishes at the end of every year. There are numerous other rankings compiled by smaller publications and websites like Franchise Business Review and Franchise Direct. I’ve even joined the fray by publishing my own Top 10 Franchises with the Best Business Models (and 1 with Possibly THE Worst), which is my second most popular blog post to date. So I ‘m always looking out for interesting lists to share with you.
I recently stumbled upon this very interesting list published in the Multi-Unit Franchisee website, from data compiled by Paul Wilbur, Chief Operating Officer of FRANdata. It’s useful because a high number of multi-unit franchisees is a good indication of franchisee satisfaction and success. When existing franchisees choose to double down on their investment by opening more locations, this suggests they are satisfied with the profit potential of their first unit — and it’s certainly a ringing endorsement of the business model.
But like any other list, this one has a few limitations. First, it ranks franchises based on the actual number of multiple unit franchisees. So as expected, the franchises that topped the list are those with thousands of locations open, even if there are other franchise concepts with even higher percentages of multi-unit franchisees.
Second, you’ll notice that several names that have struggled in recent years still figure prominently in this list (Quizno’s and Cold Stone Creamery come to mind). Inclusion in the list may indicate that a franchise was successful in the past, but it’s no assurance that the franchise is thriving today.
Finally, today’s fastest growing franchise concepts like Anytime Fitness and Five Guys Burgers and Fries appear near the bottom of the list because they have fewer units open and this list does not reflect the momentum and growth they are currently enjoying.
Despite all these limitations, this list is still worth studying because it provides prospective franchisees with additional insight into the profit potential and owner satisfaction of different franchises.
Here are the top 20 franchises that made the list, along with the percentage of multi-unit franchisees for each (I consider percentages to be a more useful metric than the actual number of multiple unit franchisees)
1. Subway – 48.52% of all franchisees own more than 1 unit
2. McDonald’s – 81.48%
3. Southern Tsunami – 51.15%
4. Dunkin’ Donuts – 55.72%
5. Burger King – 54.57%
6. The UPS Store – 19.09%
7. Domino’s Pizza – 55.07%
8. Quizno’s – 19.48%
9. Great Clips – 59.84%
10. Taco Bell – 54.66%
11. Little Caesars Pizza – 83.02%
12. Vision Source – 18.94%
13. Ace Hardware – 14.58%
14. Dairy Queen – 18.52%
15. KFC – 58.45%
16. Wendy’s – 72.23%
17. Papa John’s Pizza – 84.57%
18. Health Mart Pharmacies – 15.61%
19. Fantastic Sams – 37.03%
20. Sonic Drive-in – 47.12%
To view the entire list, please visit the Multi-Unit Franchisee website.