Franchise 500: Our Definitive Ranking of 2022's Strongest Franchises
Learn all about the industry's latest trends and most innovative brands, while exploring the best franchise opportunities.
Is franchising entrepreneurship?
That may sound like a dumb question, particularly inside a magazine called Entrepreneur that is publishing the 43rd edition of the world's biggest and most authoritative franchising ranking. And yet, as many people in this industry will attest, the question persists.
Sure, critics say, franchising is business ownership — but entrepreneurship requires grit and innovation. To which we say: You want to see grit and innovation? Look at what franchising did in 2020 and 2021.
It's been a time of economic uncertainty, false starts, abrupt change, and waves of fear. Some segments, like tutoring centers and gyms, were unable to follow their most basic business models. Others, like restaurants, had to adapt to constantly changing environments and consumer needs.
But despite this, the industry grew. The 1,177 companies on our list — which is to say, the 500 that ranked and the 677 whose data we verified but did not rank — grew in units by 2.9%. That translates into 17,082 new units opened across the world, which can reasonably be thought of as 17,082 new businesses serving 17,082 communities in 17,082 meaningful, purposeful, and nimble ways.
Was it hard? You bet it was. The growth rate in 2019 was 4.09%, which means that franchising, like every other industry, is still driving into the headwinds of a pandemic that just won't quit. This requires every individual franchisee to be agile. To connect deeply with their community. To lock arms with their franchisor. To display grit and innovation.
To be an entrepreneur.
What is an entrepreneur anyway? At this magazine, we define it as someone who makes things happen for themselves. And that's what people in franchising do every day.
Our list is built off of franchise data from July 31, 2020, to July 31, 2021. As we looked through the results, we saw some interesting trends that can tell the story of franchising's entrepreneurial spirit.
Entrepreneurs solve people's problems.
As consumers continued to spend more time at home this past year, the home improvement category boomed — with 34 companies ranking in our Franchise 500 list (versus just 26 last year). In terms of average U.S. franchise growth, it was the third-fastest growing category in the list, with its brands adding an average of 11-plus new franchise units.
Entrepreneurs are resilient.
The food industry's share of the rankings had been slipping for the last few years, but it reversed that trend this year — especially the quick-service category, which went from 80 ranked franchises in 2021 to 97 in 2022. Almost 20% of the top 500 are quick service, along with more than 25% of the top 100. Interestingly, some of the larger and better-known brands in this category lost units this year, but the category as a whole came through strong. As a result of the rising demand for healthy choices and delivery services, we've even added three new categories to the list: salads, poke, and ghost kitchens.
Entrepreneurs are inventive.
The market for yard sign rentals has exploded so much, we needed to add it as a category in our list. This became the category with the greatest average U.S. franchise unit growth, with the two companies within it — both relatively new — adding a combined 569 franchises in one year. The success of this category points to some trends as well: People are looking for franchises for a low investment, and that can be run from home as a part-time gig.
Entrepreneurs go where the opportunity is.
Lately, that means going beyond borders. International growth continues to outpace U.S. growth, as it has for years, although the gap is shrinking — there were 6,179 U.S. franchises added this year versus 7,741 international franchises. (Meanwhile, two years ago it was 9,212 and 12,720, respectively.) Overall, U.S. franchises make up around 52% of all units, and international franchises comprise about 39%.
In short, this is not just a list of 500 ranked companies (and 677 whose progress we look forward to watching). This is a list of companies — and therefore, individuals — who have pivoted, adapted, and reinvented themselves with a relentless focus on what people need now. They threw out old playbooks. They experimented. They found new (and maybe even better!) ways to operate and help people. And they've been rewarded for it.
There are still more challenges ahead to be sure. But the franchising industry has made its point: It is built for resilience. Its franchisees and franchisors are full of grit and innovation. They will tackle everything with the spirit of entrepreneurship, because that is what's at their core. Let nobody say otherwise.
To see our complete Franchise 500 rankings, please click here, and check out the stories below.