Largest Brands Sink in Exclusive Franchise Times Ranking
Minneapolis, MN (PRWEB) October 04, 2016 -- The 10 largest franchised brands collectively lost systemwide sales for the first time in the history of the Franchise Times Top 200+® as some of the very largest brands in franchising—including McDonald’s, Subway and 7-Eleven—showed massive year-over-year sales declines, according to this year’s exclusive ranking by Franchise Times. By contrast, the other 190 big brands posted stunning sales growth, with Nos. 11-200 up nearly 7 percent.
“That far outstrips the gross domestic product increase and is the best show of franchising force in more than five years,” said Tom Kaiser, associate editor at Franchise Times who wrote the lead article for the project. “Outside of the collective top 10, we can definitively say that franchising is back from the recession’s dark days.” As seen in recent years, smaller brands more than made up the difference with sales at RE/MAX up 13 percent, Chick-Fil-A up 17 percent and Keller Williams Realty growing its sales 24 percent.
In all, the largest 200 U.S.-based franchise systems posted $596.1 billion in worldwide sales in 2015, up 2.2 percent from the prior year or $12.5 billion, according to the Franchise Times Top 200+. They operated 497,335 units total, a 3.1 percent increase from the year before. The new report is published in the October issue of Franchise Times, and also available in a searchable online database updated today, which lists all 500 of the largest U.S.-based franchises.
Sales at McDonald’s fell more than $5 billion, while KFC shed $800 million and Subway lost more than a billion of its annual sales during 2015, the Franchise Times Top 200+ reports. The largest 10 brands lost a combined total of $7.3 billion in sales during the year. In addition, many of these largest brands slowed their units growth within the United States while adding new international units, suggesting that franchising’s most prominent companies have topped out at home and are accelerating an already massive pivot toward international markets.
Real estate and fast-casual restaurant brands are notable bright spots, led by Keller Williams Realty with revenue up 23.6 percent, Chick-Fil-A up 17.4 percent and RE-MAX up 13 percent. The new report includes the top 10 fastest-growing franchises by worldwide sales and numbers of units.
“Increased cost and labor pressures at some individual companies point to stretched disposable incomes for American consumers as well as an increase in competition,” Kaiser said. “At restaurants, in particular, some of the sales gains are empty calories reflecting menu prices increases rather than growth in customer traffic levels.”
The top 200’s 2.2 percent sales increase was merely a tenth of a percent higher than 2014, the second year of slim sales growth compared with a 5.6 percent gain in 2012 and 8.8 percent in 2011. The top 200 franchises increased unit counts by 15,057 units in 2015, a 3.1 percent jump. In the three previous years, that percentage increase was 3.3, 3.4 and 3.9 percent.
Burger King, Ace Hardware, RE/MAX, Wendy’s and Marriott all countered to the trend of disappointing results in the collective top 10, with sales increases of $287 million, $557 million, $1.18 billion, $405 million and $400 million, respectively.
The Franchise Times Top 200+ also analyzes 12 industry sectors and reports which brands are rising and falling in each category, and why. For example, ongoing consolidation in the automotive category drove Christian Brothers Automotive to a 20.8 percent increase in sales, to $186 million, Franchise Times reports. Industry breakouts include four restaurant categories, plus hotel and travel, personal services, printing and shipping, and more.
Franchise Times Fastest Growing Industry Sectors
1. Healthcare up 14%
2. Fast-Casual Restaurants up 10.2%
3. Personal Services up 7.6%
4. Business/Home Services up 7.2%
5. Hotel/Travel up 5.9%
Franchise Times Top 10 Franchises by Worldwide Sales
1. McDonald’s: $82.7 billion sales, -5.8% from prior year; 36,525 units, 0.7%
2. 7-Eleven: $81.5 billion* sales, -3.6%; 58,711 units, 5.2%
3. KFC: $22.6 billion* sales, -3.4%; 19,952 units, 2.7%
4. Burger King: $17.3 billion sales, 1.7%; 15,003 units, 4.4%
5. Subway: $17.1 billion sales, -6%; 44,105 units, 2.2%
6. Ace Hardware: $14.8 billion sales, 3.9%; 4,981 units, 3.9%
7. Pizza Hut: $12 billion* sales, -1.6%; 16,063 units, 2.9%
8. RE-MAX: $10.3 billion sales, 13%; 6,986 units, 3.2%
9. Wendy’s: $10 billion* sales, 4.2%; 6,479 units, -0.6%
10. Marriott Hotels & Resorts: $10 billion* sales, 4.2%; 603 units, 4.3%
*Franchise Times estimate
Franchise Times Top 10 Fastest Growers by Sales
1. Berkshire Hathaway: 49.9% increase from prior year
2. American Family Care: 45.3%
3. Dickey’s Barbecue: 33.3%
4. Right at Home: 30.9%
5. Snap Fitness: 30.5%
6. Jersey Mike’s: 28.6%
7. Planet Fitness: 25%
8. Keller Williams: 23.6%
9. Marco’s Pizza: 23.5%
10. Wingstop: 20.9%
Franchise Times Top 10 Fastest Growers by Units
1. Planet Fitness: 22.4% increase from prior year
2. Jersey Mike’s: 22.1%
3. Wingstop: 18.7%
4. Pollo Tropical: 18%
5. Marco’s Pizza: 17.8%
6. Berkshire Hathaway: 17.4%
7. Firehouse Subs: 15.1%
8. Jimmy John’s: 14%
9. Two Men and A Truck: 13%
10. Smashburger: 12.8%
ABOUT THE FRANCHISE TIMES TOP 200+
The Franchise Times Top 200+® is the only ranking by systemwide sales and locations of the largest 500 U.S.-based franchise brands. Published in the October issue, the Franchise Times Top 200+ also analyzes 12 industry sectors based on percentage change in sales growth, reports the 10 fastest-growing franchises by four different measures, and includes news stories about the biggest names in franchising. The rankings and full report, and the searchable online database, are available at http://www.franchisetimes.com.
Tom Kaiser, Franchise Times, +1 (612) 767-3209, [email protected]
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