Subway has once again been recognized as the leading franchise system. For the fifth time in six years, the chain has topped Entrepreneur's annual Franchise 500 rankings. AllBusiness also named the sandwich chain its No. 1 AllStar Franchise for 2010.
Subway, with more than 32,000 locations worldwide, is well on its way to surpassing McDonald's in number of units. The eatery also started a chain reaction among sandwich chains and other quick-service brands with the introduction of the $5 price point for its footlong subs.
While Subway leads Entrepreneur's 31st franchise ranking, in all, the sandwich segment is well represented, with 21 sandwich shops on the list this year, including fast casual chains such as Charley's Grilled Subs, Jimmy John's, Jersey Mike's and Firehouse Subs, showing strong growth.
Together, the 500 franchises on the ranking added more than 12,000 units, 2.9 percent above 2008 numbers, proving the growth of franchises as a whole. However, growth is still down from the 4.7 percent seen the year before. The franchises that grew the most were the ones who serve a budget-minded consumer, didn't cost as much to set up, or both.
"What we've been recognizing for some time is now getting widespread recognition: that the recession is adding momentum to the pursuit of entrepreneurship and self-employment," said Amy Cosper, vice president and editor-in-chief at Entrepreneur. "For the growing numbers seeking business ownership opportunities, franchising can offer advantages like having established products or services; marketing, start-up and management assistance; proven systems and business models; and brand name recognition. All this can add up to better odds for success."
Other QSRs in the top 10 include McDonald's (No. 2) and Sonic Drive-In Restaurants (No. 4). Other foodservice brands in the top 10 include Pizza Hut (No. 7) and Papa Johns International Inc. (No. 10).
The rankings for all 500 companies are determined using an exclusive formula that takes into account objective and quantifiable factors. The most important factors include financial strength and stability, growth rate and size of the system. All franchises are given a cumulative score, and the 500 franchises with the highest cumulative scores become the Franchise 500 in ranking order.
The full ranking is available in the January 2010 issue of Entrepreneur, on newsstands Dec. 22, or online.
