The Internicola Law Firm, P.C.

Forbes Top 20 Franchises to Start

A recent article by Forbes, "Forbes Top Franchise to Start", evaluates and ranks the top 20 franchises to start based off of initial investment, number of store locations, store survival rates, and hours of training offered. Below are the results offered in the article by Forbes:

#20 - Meineke Car Care Centers
Average initial investment: $262,239
Number of U.S. stores open as of 6/26/10: 858
Closures between 6/28/08 and 6/26/10: 193
Hours of training offered: 173
Average royalty rate: 5% of gross revenue

#19 - Sylvan Learning
Average initial investment: $242,079
Number of U.S. stores open as of 1/30/10: 819
Closures between 1/30/07 and 1/30/10: 161
Hours of training offered: 184
Average royalty rate: 8.5% of gross revenue

#18 - Dunkin' Donuts
Average initial investment: $1,066,750
Number of U.S. stores open as of 1/30/10: 5,459
Closures between 1/30/07 and 1/30/10: 409
Hours of training offered: 270
Average royalty rate: 7.5% of gross sales

#17 - Burger King
Average initial investment: $1,468,250
Number of U.S. stores open as of 6/30/10: 6,351
Closures between 6/30/08 and 6/30/10: 464
Hours of training offered: 414
Average royalty rate: 4.5% of gross sales

#16 - AAMCO Transmissions
Average initial investment: $266,100
Number of U.S. stores open as of 1/30/10: 837
Closures between 1/30/07 and 1/30/10: 161
Hours of training offered: 375
Average royalty rate: 7.5% of gross sales

#15 - Maaco
Average initial investment: $291,326
Number of U.S. stores open as of 6/26/10: 434
Closures between 6/28/08 and 6/26/10: 48
Hours of training offered: 160
Average royalty rate: 9% of gross receipts

#14 - Panera
Average initial investment: $1,513,694
Number of U.S. stores open as of 1/30/10: 754
Closures between 1/30/07 and 1/30/10: 44
Hours of training offered: 928
Average royalty rate: 5% of net sales

#13 - Jiffy Lube International
Average initial investment: $258,500
Number of U.S. stores open as of 1/30/10: 1,980
Closures between 1/30/07 and 1/30/10: 218
Hours of training offered: 136
Average royalty rate: 5% of gross sales

#12 -Papa John's international
Average initial investment: $292,812
Number of U.S. stores open as of 1/30/10: 2,212
Closures between 1/30/07 and 1/30/10: 283
Hours of training offered: 219
Average royalty rate: 5% of net sales

#11 - Liberty Tax Service
Average initial investment: $63,350
Number of U.S. stores open as of 4/30/10: 3,217
Closures between 4/30/08 and 4/30/10: 491
Hours of training offered: 29
Average royalty rate: 14% of gross revenue

#10 - Jimmy John's
Average initial investment: $383,000
Number of U.S. stores open as of 1/1/10: 948
Closures between 1/1/07 and 1/1/10: 18
Hours of training offered: 172
Average royalty rate: 6% of gross sales

#9 - Edible Arrangements International
Average initial investment: $223,057
Number of U.S. stores open as of 1/1/10: 783
Closures between 1/1/07 and 1/1/10: 39
Hours of training offered: 104
Average royalty rate: 5% of gross sales

#8 - Sports Clips
Average initial investment: $215,050
Number of U.S. stores open as of 1/1/10: 650
Closures between 1/1/07 and 1/1/10: 40
Hours of training offered: 153
Average royalty rate: 6% of net sales

#7 - Great Clips
Average initial investment: $155,625
Number of U.S. stores open as of 1/1/10: 2,794
Closures between 1/1/07 and 1/1/10: 307
Hours of training offered: 87
Average royalty rate: 6% of gross sales

#6 - Merry Maids
Average initial investment: $61,500
Number of U.S. stores open as of 1/1/10: 711
Closures between 1/1/07 and 1/1/10: 68
Hours of training offered: 55.25
Average royalty rate: 6% of gross sales

#5 - Papa Murphy's International
Average initial investment: $287,940
Number of U.S. stores open as of 1/1/10: 1,136
Closures between 1/1/07 and 1/1/10: 65
Hours of training offered: 275
Average royalty rate: 5% of gross sales

#4 - McDonald's USA
Average initial investment: $1,471,100
Number of U.S. stores open as of 1/1/10: 12,381
Closures between 1/1/07 and 1/1/10: 468
Hours of training offered: 855
Average royalty rate: 4% of gross sales

#3 - Kumon North America
Average initial investment: $90,894
Number of U.S. stores open as of 1/1/10: 1,293
Closures between 1/1/07 and 1/1/10: 185
Hours of training offered: 415
Average royalty rate: $16-$32 per student per month

#2 - 7-Eleven
Average initial investment: $389,378
Number of U.S. stores open as of 1/1/10: 4,685
Closures between 1/1/07 and 1/1/10: 215
Hours of training offered: 231
Average royalty rate: 49% of gross profit

#1 - Domino's Pizza
Average initial investment: $253,950
Number of U.S. stores open as of 1/1/10: 4,525
Closures between 1/1/07 and 1/1/10: 557
Hours of training offered: 1,308
Average royalty rate: 5.5% of gross sales

Before buying a franchise, it is critical that you engage in an active "due diligence" process.  The fact that a franchise is listed a part of the "Top 20" or, quite frankly as the "top" of anything just means that it is popular.  "Popularity "does not necessarily equate with "profitability".  For additional information about purchasing a franchise request a complimentary copy of "An Entrepreneur's Guide to Purchasing a Business or Franchise" by franchise lawyer Charles N. Internicola.