This lesson is part of our free Franchise 101 course.
Entrepreneur magazine’s Franchise 500 list is a big deal. Every year it gathers data on franchises operating across North America and compiles it in one place. It helps to draw attention to the power of franchising and to give a rough picture of who’s doing best.
With its broad coverage and its ranking of hundreds of very different franchises, the Franchise 500 can seem like a blunt tool. But it’s a tool that’s still worth using.
Coverage
One reason to take a look at the list is the sheer breadth of franchises covered. Over 1,100 companies submitted information for inclusion in the 2021 list, providing their Franchise Disclosure Document and other details as requested by Entrepreneur. Because of this, you can gather information about a huge range of franchises from this single source, and start to see their relative strengths.
The coverage might not go into huge depth, but it’s a starting place. It could lead you to unexpected franchises for future research.
Showing Who’s Active
Entrepreneur’s method for choosing who to include in the listing is important.
To be included in the list, a franchise must meet several criteria, including:
- At least ten units open and operating.
- At least one franchise in North America.
- The company is seeking new franchises in the US or Canada.
Because of these criteria, you can be sure that the franchises in the list are both active and actively recruiting. They’re franchises that you know you could sign up with.
Big Picture
Perhaps the biggest advantage of the Franchise 500 list is that it gives you a big picture snapshot of the industry. It shows you which franchises are active, which ones are doing well based on Entrepreneur’s 150 data points, and it lets you know which franchises other people are going to be paying attention to.
From that big picture, you can zoom in a little, to see each company’s financials, the key costs in its franchise agreement, and some of the support it offers to franchisees. The uniform format of these posts makes it easy to start making comparisons.
The Franchise 500 won’t give you all the information you need to pick a franchise, because no source does. But it’s a valuable resource to help you develop your understanding, build up the big picture, and point you toward areas for deeper research.
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