Franchising

Taco Bell, Dunkin', Popeyes top out Entreprenuer's Top Franchises

Photo: iStock

January 29, 2021

Taco Bell and Dunkin' were the No. 1 and No. 2 spot, respectively, on the latest Franchise 500 ranking from Irvine, California-based, Entrepreneur Magazine, which hit newstands this week. The only other traditional quick-service or fast food brand to make the top 10 was Popeyes Louisiana Kitchen, which placed in the No. 4 spot, according to the business magazine.

This is the first time Taco Bell took home the top ranking in the 42nd annual list of best-performing franchises across all industries, though the brand has been featured in the top 10 eleven times. It was No. 2 last year.

That granddaddy QSR of them all in the U.S., McDonald's, finished this year at No. 11. Somewhat surprisingly given the phenomenal year many pizza brands have had, none ranked in the top 50 of this year's overall list.

The other QSR brands on the Top 50 of the Top 500 are:

• No. 28 Sonic
• No. 35 Cinnabon
• No. 38 Baskin-Robbins
• No. 42 Dairy Queen

The annual survey of franchise companies and their individual performances also provides insight into the industry more broadly. This year's results show that despite the challenges of 2020, there was still growth in the franchise industry, albeit at a slower rate than previous years.

The companies that ranked in the Franchise 500 this year had a total of 510,051 units (franchise and company-owned) open and operating as of July 31, 2020, which is an increase of 14,354, or 2.9% over 2019. That compares with an increase of 21,851, or 4.6%, from 2018 to 2019.

Of the 510,051 units represented by the companies on the magazine's list, a little over 92% (472,200 units) were actual franchised locations. The rest were company-owned units. For the first time in several years, domestic growth (an increase of 7,141 U.S. franchises) outpaced international growth (6,935 franchises) for the top 500 companies.

"2020 was a challenging year for everyone, but it was also a year of unusual opportunity," Jason Feifer, Entrepreneur editor-in-chief, said in the release. "Franchises were able to be nimble and innovative, serving the needs of franchisees and customers in ways that will resonate for many years to come. We believe that, when we eventually look back on this time, we'll see it as a moment when many brands defined themselves for the future."

The key factors that go into the evaluation include costs and fees, size and growth, support, brand strength, as well as financial strength and stability. Each franchise is given a cumulative score based on an analysis of more than 150 data points, and the 500 franchises with the highest cumulative scores become the Franchise 500 in ranking order.