Page 154 - Entrepreneur - USA (January - February 2020)

THE FRANCHISE

UNDERSTANDING

THE RANKING

elcome to Entrepreneur’s 41st annual THE RANKING PROCESS begins with gathering the data. Start-
Franchise 500® ranking. ing in July 2019, we asked franchisors to fill out our online
For more than four decades, we’ve been form and submit a copy of their current franchise disclosure
studying the franchise industry and honing our document (FDD) or Canadian disclosure document. We had
W proprietary formula in order to bring you the a record-breaking year, with 1,105 companies supplying all
world’s first, best, and most comprehensive franchise ranking. And the required information. Submissions were vetted by our
with each year, the ranking becomes increasingly competitive, editorial team before being entered for data analysis.
as more and more companies see the value of expansion through To be eligible to rank, a franchisor must be seeking new
franchising and throw their hats into the ring. Our list shows just franchisees in the U.S. or Canada and must have had a mini-
how varied the franchise world has become, offering prospective mum of 10 units open and operating as of July 31, 2019, with
franchisees a myriad of choices, from more traditional options, like at least one franchise located in North America. Each eligible
restaurants, maintenance services, and gyms to the latest trends, franchisor was scored based on more than 150 data points,
like ax throwing, cryotherapy, and CBD. and those with the highest cumulative scores became the
So just how do we go about evaluating and ranking such a Franchise 500.
diverse pool of opportunities? Here’s a look behind the scenes. Franchise companies are listed on the following pages by
their industry categories. Ranked companies appear with
their position listed to the left of their names. As an additional
tool, we also list the 605 franchise companies that did not
The Five Pillars rank in the Franchise 500 but still passed our vetting process.

of the Franchise 500 ® These companies are listed in alphabetical order under “Not
Ranked” in their respective categories.
Some key factors that go into our evaluation. Check the index on page 217 to find a specific company,
or go to Entrepreneur.com/franchise500 to view the entire
ranking in numerical order.
Note: The Franchise 500 is not intended to endorse, adver-
COSTS & FEES SUPPORT BRAND STRENGTH tise, or recommend any particular franchise. It is solely a tool
• Franchise fee • Training times • Social media
• Total investment • Marketing support • System size to compare franchise operations. You should always conduct
• Royalty fees • Operational • Years in business your own careful research before investing in a franchise.
support • Years franchising Read the FDD and related materials, get help from a fran-
SIZE & GROWTH • Franchisor chise attorney and an accountant to review legal and financial
• Open and infrastructure FINANCIAL STRENGTH documents, talk to as many existing and former franchisees as
& STABILITY
operating units • Financing possible, and visit their outlets. Protect yourself by doing your
• Growth rate availability • Franchisor’s
• Closures • Litigation audited financial homework to find the opportunity that’s best for you.
statements
Research compiled by Tracy Stapp Herold and Michael
Frazier, with assistance from Sean Strain,
Note: Pillars are not listed in order of importance or weighting.
Ayesha Diwan, Karina Martinez, Dianna Mendoza, and
Niko Ruiz; technical assistance from Angel Cool.

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