The U.S. is famous for chain restaurants, franchised shops, and brand name hotels. One thing these franchises aim for is consistency in store feel, customer service, product offerings, and prices, no matter which state you’re in.
This article was written by Avery Koop and originally published by Visual Capitalist.
This visualization uses Entrepreneur’s annual Franchise 500 Ranking to showcase the best franchises in the U.S. worth owning, from Dunkin’ Donuts to Snap-on Tools.
The Best and How They Were Selected
The report assessed five broad categories to score the country’s famous chains:
- Costs & fees: including franchise fee, total investment needed to open one store, and royalty fees
- Support: including training times, marketing support, operational support, franchisor infrastructure, financing infrastructure, and litigation
- Size & growth: including open & operating units, growth rate, and closures
- Brand strength: including social media, system size, years in business, years franchising
- Financial strength & stability: including franchisor’s audited financial statements
A franchise was only considered if it was actively seeking new franchisees and must have already had at least 10 units operating.
Here’s a closer look at the top 20:
|Rank||Franchise||Initial Investment Needed||Global Units 2022|
|#1||Taco Bell||$576K – $3.4M||7,900|
|#2||Popeyes Louisiana Kitchen||$384K – $3.5M||3,851|
|#3||Jersey Mike’s Subs||$194K – $955K||2,402|
|#4||The UPS Store||$122K – $508K||5,464|
|#5||Dunkin’||$438K – $1.8M||12,957|
|#6||Kumon||$67K – $146K||26,527|
|#7||Ace Hardware||$292K – $2.1M||5,746|
|#8||Culver’s||$2.3M – $5.8M||871|
|#9||Hampton by Hilton||$12.3M – $22.8M||2,824|
|#10||Wingstop||$315K – $948K||1,873|
|#11||Tropical Smoothie Cafe||$277K – $584K||1,142|
|#12||Arby’s||$629K – $2.3M||3,561|
|#13||KFC||$1.4M – $3.2M||26,498|
|#14||McDonald’s||$1.4M – $2.5M||39,696|
|#15||Wendy’s||$330K – $3.7M||7,049|
|#16||Servpro||$217K – $271K||2,050|
|#17||Smoothie King||$264K – $1.2M||1,373|
|#18||7-Eleven||$125K – $1.3M||81,887|
|#19||Budget Blinds||$141K – $212K||1,378|
|#20||Snap-on Tools||$201K – $465K||4,771|
The number one franchise, Taco Bell, has been in business since 1964 and has 7,900 locations as of 2022, spanning beyond the U.S. to Canada, Australia, Europe, and other regions of the world. The average cost of investment to be a franchisee is between $576,000 to $3.4 million.
While most of the top 20 are in the food service industry, there is also one hotel, one shipping company, and a few hardware and home goods stores that make the list.
Ace Hardware (#7), for example, which specializes in home improvement goods, is actually an international franchise with close to 6,000 units. Kumon (#6) is an education center and is the only non-U.S. franchise on the list.
The Feasibility of Being a Franchisee
To get a better sense of the costs needed to start a franchise, let’s take a look at one of the most famous convenience stores in the world. Here’s a sample of the different fees involved in 7-Eleven’s initial franchisee process:
|Initial Franchise Fee||$0 – $1,000,000|
|Initial Investment||$125,250 – $1,333,500|
|Cash Requirement||$50,000 – $250,000|
|Veteran Incentives||10-20% off franchise fee, up to $50,000; preferred interest rates and special financing|
|Ad Royalty Fee||1%|
|Term of Agreement||15 years|
|Is franchise term renewable?||Yes|
In terms of low-cost franchises, 7-Eleven is among one of the cheapest to open, according to Entrepreneur, sometimes costing less than $150K. Other franchises with lower cost barriers of entry include UPS ($122K – $508K) and Cinnabon ($112K – $547K).
There is more to consider than cost, of course, and some franchises provide better support than others in aspects such as financing, industry training, or legal support. Popeye’s, for instance, provides in-house financing for their franchise fee, as well as connections with third-party sources to help cover equipment, inventory, payroll, and other expenses.
Looking at feasibility in regards to opportunities, some of the fastest-growing franchises include chains like Jersey Mike’s Subs and Wingstop. Here’s a closer look at the Franchise 500’s fastest growing list:
- #1 Stratus Building Solutions
- #2 Jersey Mike’s Subs
- #3 Goosehead Insurance
- #4 Signal
- #5 Wingstop
In total there are almost 800,000 franchises in the U.S. The franchise market in the country has an economic output of over $825 billion and employs over 8.4 million people. With many of these franchises continuing to grow and seek new franchisees, there is ample opportunity in the market.