How Entrepreneur Ranked This Year's Franchise 500, and the Big Trends We Saw We measure all kinds of metrics to determine the holistic health of the franchises on our list, but this year we paid particular attention to certain data points.
By Jason Feifer Edited by Frances Dodds
This story appears in the January 2024 issue of Entrepreneur. Subscribe »
To view our entire 2024 Franchise 500 list, including category rankings, click HERE
Entrepreneur published its first Franchise 500 ranking in 1980. That became a magical year for franchises — because today, in this year's ranking, 419 of the 500 companies on our list started franchising in 1980 or after.
What does this statistic tell us? We'd like to think it reflects Entrepreneur's support of great franchises — but really, it speaks to the living, breathing, ever-evolving nature of this industry.
In a way, franchising is about sameness: The goal is to create a system that easily replicates. But if the industry only rewarded sameness, every brand in our ranking would be as storied as A&W Restaurants — the oldest franchise on our list by far, having started franchising in 1925. In fact, the ranking contains zero franchises that launched in the 1930s, and only three from the 1940s — Dairy Queen, Carvel, and Baskin-Robbins, making the '40s a great decade for ice cream.
Related: Want to Own Many Businesses? These Are the Best 150 Franchises for Multi-Unit Owners.
But of course, franchising is not only about sameness. It's really about crispness — which is to say, having a crisp, clear, laser-focused understanding of consumer needs, and the ability to meet those needs as they change.
The franchising industry continues to do that with remarkable finesse.
Let's look at the trends.
The 500 companies that ranked this year had a total of 618,331 units open as of July 31, 2023, which is the cutoff for our data gathering. That's an average of 1,236.66 units per company on the list, and it represents a 2.85% increase in units over last year's total.
That growth is almost identical to the previous year's, though at least one thing has changed: U.S. franchise growth has continued to increase, while international franchise growth slowed slightly — likely a result of wars and political instability abroad.
Size and growth are visible signs of a franchise's success, which is why they're a notable part of our ranking formula — but they're not the only factors that we look at. We seek to get a holistic view of the health of the industry and the opportunities available to prospective franchisees, which is why we consider more than 150 data points to see what's behind these growth numbers. Just a few examples:
1. The support available to franchisees.
We evaluate (among other things) the number of employees at headquarters. The 500 brands in our ranking have an average of 628 employees at their headquarters, with an average of 58 of those employees working directly in franchise development and support roles.
2. The training that franchisors offer.
The top 500 franchisors offer an average of 142 hours of training to each franchisee, 56.7 hours of classroom training, and 85.3 hours of on-the-job training.
3. How each brand engages its fans.
The top 500 franchises have a combined total of more than 435 million social media followers, an average of 870,178 per brand.
Food continues to be the largest category in the Franchise 500, with a total of 124 franchises ranked, including 35 in the top 100. Quick-service restaurants is the strongest food subcategory; there are 104 QSR brands in our ranking this year, up from 101 last year. But full-service restaurants are gaining ground; they went from 10 ranked brands in 2023 to 16 ranked in 2024. Breakfast/brunch full-service restaurants are doing particularly well.
But there's a lot more to franchising than food, of course. New categories always emerge, as brands launch to serve new consumer needs. Our ranking this year includes some new subcategories — mental health services, IV therapy, fencing, and laundromats — that show where new opportunities are cropping up.
When you take all this together, the prescription is clear: To win in franchising, and to rank highly in the Franchise 500, a brand must build a system that sustains. It must be resilient and focused, but also nimble and creative. And there is always room for more of that.
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