Entrepreneur Magazine, the industry’s premier magazine about all things to do with small business, ranks franchise systems each year based on financial and statistical data and surveys collected from more than 1,000 franchisors. All of which is analyzed by an independent certified public accountant.
These rankings are provided as a research tool which prospective business owners can use to compare franchises when conducting a preliminary search for a business to own.
The Franchise 500 takes into account the following criteria of each company:
Financial strength and stability- Number of years in operation
- Length of time franchising
- Start up costs
- Litigation
- Percentage of terminations
- Financing provided by franchisor
The franchise then receives a quantitative score and is placed in order from 1 to 500, #1 being the coveted position.
Entrepreneur Magazine compiled the first Franchise 500 list in 1979. It was the first list of its kind and, today, is still the most comprehensive franchise ranking in the world.
To be considered for the list, companies must meet the following qualifications: have a full Franchise Disclosure Document (FDD) or Canadian Disclosure Document and have a minimum of 10 units (with at least 1 unit located in the U.S.).
The process begins the previous summer when data is collected through surveys. This year’s list originally had 951 companies before it was whittled down to 500.
In addition to the Franchise 500, Entrepreneur Magazine publishes the following lists and ranks franchises in 17 industries:
Top Low-Cost Franchises- Top Home-Based/Mobile Franchises
- Fastest-Growing Franchises
- Top New Franchises
- Top Global Franchises
Being included on the lists gives franchises clout to promote their ranking in their marketing materials and serves as somewhat of a stamp of approval within the industry.
Making the #1 spot on the 2016 Franchise 500 is Jimmy John’s Sandwiches. Quite simply, they make gourmet sandwiches and are now one of the fastest growing franchises in the United States. Tap here to learn more about the #1 franchise opportunity in America.
Look for other Franchise.com clients who made the grade and are listed on Entrepreneur Magazine’s 2016 Franchise 500. See if your favorite is on the list.
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