About the Franchise 500^®

The initial Franchise 500^® in 1980 was the first ranking of franchises in the industry. Though we've since noticed a smattering of imitators, Entrepreneur's Franchise 500^® is still the best and most comprehensive rating of franchises in the world. Over the years, we have polished and perfected our ranking procedure, giving us a formula that accurately identifies today's top franchise opportunities for you.

Only franchise companies that submit full Uniform Franchise Offering Circulars (UFOCs) or Canadian disclosure documents and whose information is verified by Entrepreneur are considered for the Franchise 500^® rankings. A franchise company must also have a minimum of 10 units with at least one being a U.S.-based franchise, it must be seeking new franchisees in the U.S., and it cannot be in Chapter 11 at the time the rankings were compiled. (An exception to this rule is Canadian-based companies that are only expanding in Canada.)

All companies, regardless of size, are judged by the same criteria: objective, quantifiable measures of a franchise operation. The most important factors include financial strength and stability, growth rate and size of the system. We also consider the number of years in business and length of time franchising, startup costs, litigation, percentage of terminations and whether the company provides financing. Financial data is audited by an independent CPA. We do not measure subjective elements such as franchisee satisfaction or management style, since these are judgments only you can make based on your own needs and experiences. The objective factors are plugged into our exclusive Franchise 500^® formula, with each eligible company receiving a cumulative score. The 500 franchises with the highest cumulative scores become the Franchise 500^®.

Remember that the Franchise 500^® is not intended to endorse, advertise or recommend any particular franchises. It is solely a research tool you can use to compare franchise operations. Entrepreneur stresses that you should always conduct your own independent investigation before investing money in a franchise. Read the UFOC and related materials carefully, get help from an attorney and CPA in reviewing any legal and financial documents, talk to as many existing (and former) franchisees as possible, and visit their outlets. The best way to protect yourself is to do your homework.

Research compiled by Maria Anton Conley, Tracy Stapp and Emily Weisburg with assistance from Adam Salazar; financial analysis by David R. Juedes, CPA; graphic design by Matt Samarin; data compilation assistance from Paul Scott; additional assistance from Kristen Henning, Celeste Hoang, Jake Kilroy, Erin Mahoney, Trevor Owens, Mallory Somerset and Joanne Yao.