4 Brands You Thought Were Franchises but Aren’t

When people think of brands that dominate a certain industry, they typically come up with names like Mcdonald's, Starbucks and Dunkin’. Although it might seem like all of these brands offer franchise opportunities because of their established names, many of them are chains (including Starbucks). Chain stores are fully owned and managed by the parent corporation on behalf of the shareholders. A franchise unit, however, is owned by a franchisee (an outside investor).

Here are four big-name brands that you probably assumed are franchises but aren’t.

Starbucks

Founded in 1971, Starbucks has dominated the coffee industry with more than 32,000 locations. However, the worldwide brand has chosen not to franchise its concept. 

Starbucks, based in Seattle, WA, credits its core values of inspiring and nurturing the human spirit one person, one cup and one neighborhood at a time to its success and believes that franchisees would be the “middleman” in between them and their customers, which would lower the quality of service.

But with more than 15,000 domestic locations and 17,000-plus international coffee shops, there have been some loopholes in Starbucks’ anti-franchisee stance. In 1991, Starbucks allowed Host Marriott to begin opening locations in airports. Soon after, licensed stores began popping up in hospitals and grocery stores. Since growing into the international market, Starbucks has created partnerships with licensed individuals and companies.

Wawa

The East Coast is filled with Wawa locations, and the fresh food and beverage convenience store has a cult-like following in its local communities. The brand, which boasts $13 billion in sales per year and provides 37,000-plus jobs, was founded in 1964 in the Philadelphia suburbs as a small dairy mart. 

While building its empire, Wawa expanded to include gas stations at its super stores and is now keeping up with current demand by including Tesla charging stations and kale salads. The family-owned business has declined many requests to franchise to ensure quality across its locations in six states.

Chipotle

Chipotle believes that business should be simple, which is why the brand offers fresh ingredients, quick service and a simple business model. This business model excludes franchisees.

As one of the dominating players in the fast casual Mexican food industry, Chipotle has no shortage of aspiring franchisees. However, the brand believes that companies franchise for two reasons — because they need money to grow or need operators to run their restaurants. Chipotle claims it does not. 

The Denver-based brand, founded in 1993, has grown from one small burrito shop with essentially no business plan other than making quality food, to an industry success with 2,700-plus locations as of 2020.

In-N-Out

If you’ve been on the West Coast, you’ve heard of In-N-Out burgers. More than 70 years ago, the brand opened its first location. Since then, it has grown to more than 350 locations within a 300-mile radius of its distribution facility to ensure products are fresh and never frozen. While competitors might double or triple the number of locations, they lack the exclusivity In-N-Out has gained throughout the years as the brand has no plans to expand east.

In-N-Out, a privately-held, family-owned business, publicly announced they will not expand as it is not what the founding members of the Synder family would have wanted.

While other fast casual brands saw a decrease in sales throughout the pandemic, In-N-Out was able to continue to hire new employees and open new locations in 2020 while maintaining its product quality, even when beef prices rose 26%.