Article

Restaurant industry has strong showing in Entrepreneur's top franchise rankings

Magazine's annual rankings of top franchised companies weigh stability, growth rate, size of the system, startup costs and more.

December 20, 2011 by Alicia Kelso — Editor, QSRWeb.com

The restaurant industry seems like a good investment for 2012; at least according to cumulative data compiled by Entrepreneur magazine.

The publication just released its 33rd annual Franchise 500, a list of the country's best franchised companies based on financial strength and stability, growth rate and size of the system. Quick-service, pizza and fast casual brands made up more than 20 percent of the list, including A&W Restaurants, which has been franchising since 1925, and newer companies such as Smashburger.

Other considerations for the ranking include the number of years a company has been in business, length of time it's been franchising, start up costs, litigation, percentage of terminations and whether or not the company provides financing. The factors were added into the Franchise 500 formula and then listed, in order, based on a cumulative score.

The full list can be viewed here. Below is a look at many of the restaurant brands being represented on this year's list:

No. 2, Subway:The Connecticut-based Subway chain recently became the largest QSR in the world and includes 35,500-plus units. It ranks second on the franchise list behind Hampton Hotels, and has a startup cost of $84.8K to $258.8K.

No. 6, McDonald's: The ubiquitous Golden Arches, a longtime top 10 franchisee, supports its operators through training, ongoing meetings, purchasing cooperatives, field operations/evaluations, co-op advertising, restaurant-specific support and more. Startup costs range between $1.07MM and $1.89MM.

No. 9, Pizza Hut: The chain, owned by parent company Yum! Brands, is growing aggressively throughout the world and enjoys "fine dining" status in China.  Startup costs range between $295K to $2.15MM.

No. 10, Dunkin' Donuts: The newly IPO'd coffee/donut chain offers training, meetings, grand opening support, security/safety procedures, regional advertising support and more. Startup costs range from $368.9K and $1.74MM.

Other restaurants on the list and their rankings include:

1. No. 17: Yum! Brands' KFC Corp.
2. No. 20: Yum! Brands' Taco Bell Corp.
3. No. 22: Jimmy John's Gourmet Sandwich Shops
4. No. 23: Dairy Queen
5. No. 27: Papa Murphy's take-and-bake pizza
6. No. 31: Papa John's International Inc.
7. No. 32: CKE Restaurants' Hardee's chain
8. No. 34: Church's Chicken
9. No. 47: CKE Restaurants' Carl's Jr. chain
10. No. 48: Dunkin' Brands' Baskin-Robbins Co.
11. No. 50: Cold Stone Creamery
12. No. 52: Arby's Restaurant Group
13. No. 58: Recently sold Long John Silver's Restaurants Inc.
14. No. 62: Buffalo Wild Wings
15. No. 70: Cinnabon
16. No. 79: Hungry Howie's Pizza & Subs
17. No. 80: Sonic Drive-In Restaurants
18. No. 81: Jersey Mike's Subs
19. No. 83: Culver Franchising System Inc.
20. No. 88: Bojangles' Restaurants Inc.
21. No. 89: Moe's Southwest Grill
22. No. 90: Qdoba Mexican Grill
23. No. 92: Wingstop Restaurants Inc.
24. No. 93: Charley's Grilled Subs
25. No. 96: Firehouse Subs
26. No. 102: Auntie Anne's Hand-Rolled Soft Pretzels
27. No. 108: Blimpie Subs and Salads
28. No. 113: Marco's Franchising LLC
29. No. 122: Smoothie King
30. No. 124: Taco Time
31. No. 126: Wetzel's Pretzels
32. No. 132: Pita Pit Inc.
33. No. 134: Chester's
34. No. 136: Jet's Pizza
35. No. 143: Nathan's Famous Inc.
36. No. 148: Penn Stations East Coast Subs
37. No. 151: Togo's Franchisor LLC
38. No. 152: CiCi's Pizza
39. No. 156: Rita's Italian Ice
40. No. 162: Taco John's International Inc.
41. No. 165: Great American Cookies
42. No. 166: Great Harvest Franchising Inc.
43. No. 172: Which Wich Superior Sandwiches
44. No. 188: Villa Enterprises
45. No. 190: Pizza Ranch
46. No. 198: Checkers Drive-In Restaurants Inc.
47. No. 199: Carvel
48. No. 207: Yogurtland Franchising Inc.
49. No. 212: Famous Dave's
50. No. 227: The HoneyBaked Ham Co. & Café
51. No. 235: Yogen Fruz frozen yogurt
52. No. 238: Ben & Jerry's
53. No. 242: Ledo Pizza System Inc.
54. No. 245: Pretzelmaker
55. No. 246: Recently sold A&W Restaurants Inc.
56. No. 250: Donatos Pizza
57. No. 253: Menchie's frozen yogurt
58. No. 255: Straw Hat Pizza
59. No. 259: Rocky Mountain Chocolate Factory
60. No. 265: Smashburger Franchising LLC
61. No. 268: Biggby Coffee
62. No. 291: Fox's Pizza Den
63. No. 292: Marble Slab Creamery, which recently combined with MaggieMoo's to form one concept
64. No. 296: Philly Pretzel Factory
65. No. 300: Zoup! Systems LLC
66. No. 307: Freddy's Frozen Custard LLC
67. No. 312: Capriotti's Sandwich Shop Inc.
68. No. 319: MixStirs, smoothies, wraps and salads
69. No. 331: Tasti D-Lite
70. No. 332: Stevi B's Pizza
71. No. 338: Hurricane Grill & Wings
72. No. 345: Mountain Mudd Espresso
73. No. 347: The Haagen-Dazs Shoppe Co. Inc.
74. No. 350: Bruster's Real Ice Cream
75. No. 357: Mooyah Franchise LLC
76. No. 359: Orange Leaf Frozen Yogurt
77. No. 365: Sub Zero Ice Cream
78. No. 368: VooDoo BBQ & Grill
79. No. 382: Maui Wowi Hawaiian Coffees & Smoothies
80. No. 384: Cousins Subs
81. No. 390: L&L Hawaiian Barbecue
82. No. 409: Gigi's Cupcakes LLC
83. No. 411: Boardwalk Fresh Burgers & Fries
84. No. 420: Big Apple Bagels
85. No. 423: Pizza Factory Inc.
86. No. 424: Red Mango Franchising Co.
87. No. 431: Port of Subs
88. No. 439: Great Wraps sandwiches and subs
89. No. 442: Elevation Burger
90. No. 458: Golden Chick
91. No. 460: Nestle Toll House Café by Chip
92. No. 470: Figaro's Pizza
93. No. 476: Nature's Table Café
94. No. 477: The Great Steak & Potato Co.
95. No. 479: The Human Bean Drive Thru
96. No. 483: Larosa's Inc. pizza and Italian
97. No. 484: Salsarita's Fresh Cantina
98. No. 486: HuHot Mongolian Grill
99. No. 489: The Steak Escape

Fastest-growing franchise concepts

Not only do restaurants make up a formidable chunk of the top ranked franchised businesses in the U.S., they also have a solid representation on Entrepreneur's list of fastest-growing franchises. The ranking is based on the number of new units added in the U.S. and Canada from 2010-2011.

Subway, ranked No. 3 last year, is ranked as the No. 2 fastest-growing franchise this year. The chain has been ranked in the top 3 since 2007.

Dunkin' Donuts, ranked No. 29 last year, is this year's No. 6, and for good reason. The Massachusetts-based chain is in the middle of an aggressive expansion plan, including west of the Mississippi and overseas.

Chester's quick-service chicken restaurant is this year's 7th fastest growing franchise system in the country. Last year, it ranked No. 11. It includes about 690 units with total investment costs of $6.14K to $344.5K.

Also included in the fastest-growing list are: Jimmy John's (11); Pizza Hut (13); Papa John's International (15); Taco Bell (20); McDonald's (27); Red Mango (29); Edible Arrangements International Inc. (31); Menchie's (33); Dairy Queen (39); Cinnabon (42); Buffalo Wild Wings (44); Papa Murphy's (46); Jersey's Mike's Subs (48); Auntie Anne's Hand-Rolled Soft Pretzels (51); Yogurtland (58); Marco's pizza and Smashburger (64, tied); Orange Leaf Frozen Yogurt (71); Firehouse Subs (74); Which Wich Superior Sandwiches (76); Charley's Grilled Subs and Yogen Fruz (79, tied); Jet's Pizza (82): Gigi's Cupcakes (87); Bojangles' Restaurants and Moe's Southwest Grill (101, tied).

Also of note: Yogurtland (No. 3), Menchie's (No. 9) and Smashburger (No. 10) were listed on the top 10 new franchisees list for 2012.

Read more about franchising. 

About Alicia Kelso

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