Franchise Times, a leading voice in the world of everything franchising, has just released its 21st annual review of the top 200 franchises by sales volume. Some of the key points of interest from this review are summarized here…
- The 10 largest franchise brands roared back in 2016 after losing sales the prior year.
- The top 10 companies grew sales by 2.8%. The other 190 big franchisors grew by a 3.9% percent jump that’s still impressive, but down sharply from the previous year.
- The 200 largest franchise brands are growing much faster than the overall economy with an annual sales increase of 3.4%. The results are a solid improvement from last year’s tepid 2.2% gain, and double the current U.S. inflation rate of 1.7%.
- McDonald’s once again provides this year’s marquee statistic with a huge $2.3 billion surge in sales after its $5 billion-plus drop the prior year dragged down average sales numbers for the top 10 and quick-service restaurant categories.
- Even though its sales were up $43 million over the prior year, Wendy’s failed to match the larger gains of its rivals and, consequently, fell out of the top 10. It was replaced by fast-growing Domino’s Pizza, which is now the ninth largest U.S.-based franchise.
- Going global – As more of the largest brands run out of available turf in their home country, the 200 largest franchise brands continue their multi-year pivot toward international markets, with 11,124 new overseas units added during 2016 compared with fewer than 926 new units in their home markets.
- Subway and Pizza Hut were the only two to see declines in the top 10. Subway’s global sales declined 0.6% and Pizza Hut’s sales dipped 0.2%.
- In terms of number of units (locations), 7-Eleven (61,805) leads the way followed by Subway (45,936) and McDonald’s (36,899).
- Outside of the 10 largest franchises, many of the largest casual restaurants struggled as a sign of the times. Applebee’s slipped one rung down to No. 26 on a 6.2 %decline in sales. Chili’s and TGI Fridays followed suit, down 1% and 1.8%, respectively. Denny’s provided a ray of sunshine in the casual segment, up 3.7% for the year.
- Fitness brands bulked up across the board, with Planet Fitness up a staggering 26.7% and Anytime Fitness growing an impressive 13.6%.
- While the pendulum has swung in both directions over the decades, many franchisors have been selling company-owned units to their franchisees or exclusively developing franchisee-owned units.
- Globally, U.S.-based franchises added 12,050 new units total during 2016, an increase of 2.4% and a slowdown compared with the previous year’s rate of 3.1%.
See the full report at http://www.franchisetimes.com/October-2017/Ranking-the-biggest-brands-in-franchising/.