The Franchise 500: What It Is and Where to Find It

When exploring franchise opportunities, you may notice some brands showcasing their ranking on the “Franchise 500.” This prestigious list is produced every year by Entrepreneur, a magazine and website that publishes stories about business and entrepreneurship. Recognized as the world's first and most comprehensive franchise ranking, Franchise 500 is an invaluable resource that sheds light on the leading brands and their impact on the business community. 

The list has been a staple for over four decades, showcasing the evolving landscape of the franchise industry. Franchise 500 provides prospective franchisees with a diverse array of choices, ranging from traditional options (restaurants, maintenance service, gyms) to emerging categories (ax throwing, cryotherapy, cannabinoid [CBD] businesses). 

The Five Pillars of the Franchise 500

To determine who makes the Franchise 500, Entrepreneur uses a comprehensive evaluation process, considering over 150 data points. The ranking is based on five key pillars, each consisting of factors that contribute to a franchise's overall standing:

1. Costs and Fees

• Franchise Fee
• Total Investment
• Royalty Fees

2. Support

• Training Times
• Marketing Support
• Operational Support
• Franchisor Infrastructure
• Financing Availability
• Litigation

3. Size and Growth

• Open and Operating Units
• Growth Rate
• Closures

4. Brand Strength

• Social Media Presence
• System Size
• Years In Business
• Years Franchising

5. Financial Strength and Stability

• Franchisor's Audited Financial Statements

The Ranking Process

The process of creating the Franchise 500 kicks off in July each year, as franchisors are invited to fill out an online form and submit their current Franchise Disclosure Document (FDD) or Canadian Disclosure Document. To be eligible for ranking, a franchisor must actively seek new franchisees in the U.S. or Canada, and have a minimum of 10 open and operating units by a certain date, including at least one franchise located in North America. In 2022, a whopping 1,321 companies supplied all the required information. 

The eligibility criteria ensure that the Franchise 500 represents franchises with a substantial presence and growth potential in North America. The data collected is then meticulously analyzed, with each eligible franchisor being scored based on the predefined criteria. Those franchises with the highest cumulative scores earn a coveted spot on the list.

Where To Find the Franchise 500

Entrepreneurs and prospective franchisees can access the Franchise 50 list in both the print edition of Entrepreneur magazine and on Entrepreneur.com. The detailed rankings provide a wealth of information, allowing individuals to make informed decisions based on the specific criteria that matter most to them.

Entrepreneur’s Franchise 500 is not just a ranking but a comprehensive resource that reflects the diversity of the franchise industry. Whether you're a seasoned entrepreneur or someone exploring franchise opportunities for the first time, this list is a useful tool to navigate the vast landscape of franchising.