What does it take to get to the top of Entrepreneur Magazine's annual Franchise 500 ranking? The 10 franchise systems that follow have captured their place in the spotlight for their outstanding quality, flexibility and strategic improvements. And it helps to have won the hearts of both franchisees and the public. Click through for an overview of the highlights.
#1: Hampton Hotels
Hampton sits at No. 1 not because it bundles for free services that more upscale hotels charge through the nose for, or because it has a customer satisfaction guarantee (your money back if you're displeased for any reason, no questions asked) that's borderline insane, or because it just put waffle irons in all of its hotels. None of these hurt, but Hampton is tops because it listens to consumers and takes their ideas to heart.
Did you know: This year Hampton is launching in the U.K., Mexico, India, Romania and Trinidad.
Number of franchises: 1,753
Franchising since: 1984
2010 rank: #4
Startup costs: $3,716,000 - $13,148,800
#2: ampm
Ampm has been pushing hot dogs and Snickers bars to U.S. travelers for more than 30 years, but the brand may not ring a bell. That's because for most of that time, ampm was only found in five western states, as the convenience brand of the Arco gas company. But in 2006, BP, which absorbed Arco in 2000, decided that the popular convenience store chain was ready to go national. Since then, BP has steadily sold off its BP Connect and other gas-station convenience stores, converting them to ampm franchises.
Did you know: In 2010, ampm launched a "secret menu" of snack bar recipes available only via Facebook.
Number of franchises: 3,177
Franchising since: 1979
2010 rank: #10
Startup costs: $1,786,929 - $7,596,688
#3: McDonald's
You probably haven't noticed many Golden Arches going up around the country--the fast-food empire has more or less hit its North American saturation point, adding about 100 locations to its existing stock of 13,894 in 2010. But
McDonald's has managed to stay dynamic (though it is putting up new stores in India and China, which is expected to open 600 new Mickey Ds by 2013). The focus at home is on improving quality and customer experience.
Did you know: This year GPS enthusiasts calculated the furthest you could get from a McDonald's in the Lower 48: 115 miles away in a deserted area of northwest Nevada.
Number of franchises: 26,209
Franchising since: 1955
2010 rank: #2
Startup costs: $1,057,200 - $1,885,000
#4: 7-Eleven
It's not that
7-Eleven isn't picky about its locations -- it pays plenty of attention to demographics, site selection and other basic metrics of franchising. It's more that it's adaptable, and during the past couple of years it has become like the yoga-master of franchising. Want to convert a mom-and-pop convenience store to a 7-Eleven? Need to squeeze a small convenience store onto a college campus or airport? Own a gas station but don't have the cash or experience to run the convenience store? 7-Eleven can help. It's no wonder it has 39,300 locations worldwide and more than 8,300 in North America, including 285 that opened last year.
Did you know: A new 7-11 opens every 6.5 hours
Number of franchises: 37,039
Franchising since: 1964
2010 rank: #3
Startup costs: $30,800 - $604,500
#5: Supercuts
Before the Great Recession hit,
Supercuts' growth pattern mirrored pretty much everyone else's -- wherever a shopping plaza was going up in a new market, it was there. But as construction projects dried up around the country, Supercuts began to rethink that strategy.
The company will add 100 units nationally this year, and expectations are for double that in 2012.
Did you know: A Supercuts franchisee in Houston set a new Guinness world record in 2009 by giving 349 haircuts in 24 hours.
Number of franchises: 1,035
Franchising since: 1979
2010 rank: #5
Startup costs: $112,550 - $243,200
#6: Days Inn
The old chestnut in the hospitality industry is that hotels are the first to feel a recession and the last to recover. This is demonstrably true. So
Days Inn, one of Wyndham Hotel Group's 13 brands and the largest economy hotel chain in the world (based on number of rooms), did what any company in fear for its profit margin would do when tough times struck. It tried to save every penny it could.
Did you know: In recent years, Days Inn has opened hotels in China, the U.K., Costa Rica and Russia.
Number of franchises: 1,857
Franchising since: 1972
2010 rank: #21
Startup costs: $192,291 - $6,479,764
#7: Vanguard Cleaning Systems
Vanguard Cleaning Systems is
in the Top 10 -- and its competitors are not -- because its quality and customer service are rare in the cleaning biz. Instead of rushing to put franchisees on the streets, Vanguard has taken care to select the right master franchisees and emphasize training. "Businesses look to companies like ours because of our training, customer support and quality," says Mark Heisten, vice president for business development.
Did you know: Vanguard has benefited from the recession as companies have scrapped their janitorial department to cut costs.
Number of franchises: 1,847
Franchising since: 1984
2010 rank: #30
Startup costs: $8,200 - $38,100
#8: Servpro
One good thing came out of the catastrophic floods that hit downtown Nashville, Tenn., last May: It gave
Servpro a chance to show its home state what it's all about. The cleanup and restoration company, which specializes in smoke, fire, water and mold damage, mobilized its disaster recovery team and brought almost 700 crews from its 1,600 locations to Music City to help clean up the mess. It showed just how strong a national franchise can be in an industry dominated by small independent1 operations.
Did you know: After 40 years in business, Servpro opened its first international location in 2010.
Number of franchises: 1,526
Franchising since: 1969
2010 rank: #9
Startup costs: $127,300 - $174,700
#9: Subway
Last April,
Subway threw its hat into a crowded ring by introducing a full line of breakfast sandwiches nationally. It was a risk for the hero-slinging behemoth, but according to the company, which does not release sales figures, the initiative exceeded expectations and boosted per unit averages. That has helped keep the 34,000-unit restaurant expanding. It added 2,000 stores in 2010, including 800 new locations outside the United States, and it expects to open 2,100 sites this year.
Did you know: Subway claims there are more than 2 million sandwich varieties available in their stores
Number of franchises: 33,188
Franchising since: 1974
2010 rank: #1
Startup costs: $84,300 - $258,300
#10: Denny's
Denny's is an American institution -- which is good and bad. It's got unbelievable brand recognition, but it's also saddled with decades of baggage, including a highly publicized discrimination lawsuit in the 1990s, a reputation as a hangout for late-night hoodlums and a bastion of bad food. But in 2009, Denny's began a hard and fast climb into the 21st century with one Super Bowl commercial, offering a free breakfast for anyone willing to wait. Two million people went in.
Did you know: Denny's started out in 1953 as Danny's Donuts, becoming Denny's in 1959
Number of franchises: 1,374
Franchising since: 1963
2010 rank: #1
Startup costs: $1,125,609 - $2,396,419
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