Top 100 Franchises Report 2021: Overview

Each year, since 2009, Franchise Direct has published our Top 100 Global Franchises Ranking, an insightful industry snapshot of how a number of the most successful franchises in the world fared in the past year, compared to the year before. Our Top 100 Ranking is one of the most well-known, reputable franchise rankings, having frequently been cited by industry professionals.

This is the accompanying Top 100 Report.

It’s full of engaging tidbits on selected franchises to catch you up on everything you might have missed throughout the previous year in franchising.

After reading this Top 100 Overview, learn how franchisors adjusted and adapted to the curveballs COVID-19 through their way on page two.

Our report concludes with a look at the New Zealand franchise industry, our international franchise market spotlight for this year.

Before we get to the report, a couple of notes on the ranking.

• Because the evaluation period (approximately fall 2019 to fall 2020) includes the latter part of 2019 and the beginning of 2020, not all COVID impacts are reflected.
• In years past, there was a requirement for companies to be operating in at least two countries to be eligible for the Top 100 ranking. Starting this year, that requirement was dropped.

For more details on how the ranking is compiled, check out our Top 100 ranking methodology page.

The Top 10

Being the most familiar—and bankable—name in franchising never hurts. That was made especially clear when a pandemic hit.

Of course, McDonald’s (#1) had a down spring season for what it’s used to. Virtually all U.S. restaurants did. But by July domestic same-store sales had rebounded for the food franchise—and even started to edge into positive territory. By October, traffic numbers were trending above 2019 levels for its afternoon and evening dayparts.

In fact, according to an internal memo viewed by Bloomberg News in December, McDonald’s management said the company was on track for “a record year.”

Although it didn’t recover quite as fast as McDonald’s, YUM Brands has appeared to weather the COVID storm quite nicely. In fact, according to analysts, “KFC (#2) and Taco Bell are firing on all cylinders, posting sustained multiyear growth.”

Next is fellow fast food franchise Burger King (#3). The burger chain, which celebrated the opening of Canadian restaurant number 300 in November, is leaning into its drive-thru operations for the future. The franchise has unveiled plans for a triple drive-thru prototype that will include a dedicated lane for delivery drivers.

7-Eleven (#4) continues its reign as the largest franchise system by number of units. Over the summer, the convenience store chain surpassed 71,100 locations worldwide.

Domino’s leaps into the top five by leaning on some previously hard-earned lessons. CEO Ritch Allison says that the lessons learned from the company’s crisis 12 years ago led to its ability to adapt so quickly to pandemic conditions.

Retailer Ace Hardware(#6) is a reflection of the overall success those in the home improvement sector enjoyed in 2020. While full year numbers have yet to be released, the franchise most recently reported record third quarter revenues of $2 billion, an increase of 30.7% over the same period for 2019.

Some real estate agents went as far as to call the industry’s quick bounce back “miraculous” considering how uncertain everything appeared in the spring (certain locales such as NYC excepted). The highest of the real estate franchises in this year's Top 100 is Century 21 (#7).

The company, which now counts around 12,600 offices worldwide, noted “significant franchise renewals and new company additions” during the time period of May to August 2020.

Another pizza franchise also used resiliency to take a big step forward this past year.

In August 2019, Rob Lynch wasn’t deterred by what seemed like a daunting task. He was entering his new job with Papa John’s (#8), a company in the midst of a sustained decline, and also reeling from a public and ugly split from its Founder John Schnatter.

However, Lynch had had success in the rebuilding process before. He previously served as President of Arby’s, which went through its own transformation under his guidance.

Innovation was the strategy. In 2020, Papa John’s launched six new products—yes—in the midst of a global pandemic.

It’s definitely paid off.

Same-store sales in the third quarter of 2020 were 23.8% better than the previous year, a far cry from the -9.8% the company posted in the third quarter of 2018.

As noted above, Taco Bell (#9) is on a hot streak—and it wants to keep it going by flexing its digital muscle.

In fact, Chief Global Brand Officer, Nikki Lawson, has stated she believes the brand will generate 50% of its transactions through digital channels in the next couple of years.

Pizza Hut (#10), the other of YUM Brands’ big three, has been flat in terms of growth over the past few years.

However, delivery, particularly in China—an important overseas market for both Pizza Hut and sibling brand KFC—has aided in the maintenance of overall success. In the country, delivery now accounts for 30% of sales at KFC restaurants and 40% at Pizza Hut restaurants.

Notes from the Rest of the Top 100

In early March, Wendy’s (#11) held a big roll out for its breakfast re-launch for the United States. Less than a month later, stay-at-home orders swept across the country.

The circumstances could’ve been dire, but instead, things went far better than expected. Breakfast sales at Wendy’s have stabilized around 8% of the company’s overall take, and executives say the daypart has been profitable.

Once again, mergers and acquisitions is a big story in the Top 100. This time, it is mega franchisor Inspire Brands buying Dunkin’ Brands, which consisted of Dunkin’ (#12) and Baskin-Robbins (#21). Inspire Brands’ portfolio also includes Arby’s (#65), Buffalo Wild Wings, Sonic Drive-In, Jimmy John’s and Rusty Taco.

Subway (#13) is launching a new online catering platform with ezCater across the U.S.

According to Restaurant Business, the sandwich chain is looking to offset the lack of larger event catering with other revenue streams, such as: catering opportunities for family gatherings and company lunches.

The dropping of the at least two countries requirement welcomed several big franchise names into ranking like Chick-fil-A at (#14) (though the company does now have a few Canadian locations too).

Other newbies include Jersey Mike’s (#18), Kiddie Academy (#44), Culver’s (#45), Primrose Schools (#50), Pinch A Penny (#63), McAlister's Deli (#64), Christian Brothers Automotive (#77), Mountain Mike’s Pizza (#96), and more.

As mentioned above, real estate had a better year than initially expected. Also new to the ranking, are real estate franchises Keller Williams Realty (#57) and Berkshire Hathaway HomeServices (#97).

The fitness franchise fared noticeably better than some its counterparts, despite the fact that there was a point in the earlier days of the pandemic when all of its locations were shutdown.

Looking towards the future, Orangetheory has already opened over 30 studios since August.

Carl’s Jr. (#37) just opened its 300th Mexican location in January 2021. The franchise first entered that market in 1991, and has plans to add an additional 100 locations in Mexico by 2024!

Jack in the Box (#48), another Top 100 newcomer, is considering large-scale expansion for the first time in years following a steady rise in same-store sales by over 10% for parts of 2020.

While some companies were able to maintain, or in instances record a positive year, not everyone was lucky. Hertz (#93) is one of those not so fortunate ones. The car rental company, which is entering its 96th year of operation, filed for bankruptcy in May. Since then, it’s taken a slew of cost-cutting measures, and has agreed to file its Chapter 11 reorganization plan by August 1, 2021.

Dickey's (#99) is entering 2021—and the ranking—on the heels of “record-breaking holiday sales.” The barbecue franchise posted positive same-store sales numbers for the last seven months of the year, due largely in part to its quick pivot to digital when COVID mitigation measures started.

According to a release, Dickey’s digital sales are exceeding pre-COVID performance by over 200%. Dickey has also said that digital sales have now replaced what used to be traditional dine-in traffic "nearly 1-to-1."

Hotels Take a Hit in 2020, but 2021 Outlook is Strong

Hotels have been hit significantly hard by COVID-19. The impact was definitely felt in the ranking. All of the hotel conglomerates fell noticeably.

However, one hotel group that sustained noticeably less loss monetarily than the others is Choice Hotels (#35). Back over the summer, when companies were divulging their second quarter results, Choice Hotels revealed a relatively small $2.4 million loss.

Relative because fellow hoteliers like Hilton Worldwide (#88) and Hyatt reported hundreds of millions of dollars in losses for the quarter that same week. Overall, revenue loss for Choice Hotels has been in the 30% range while other chains have been mostly in the 50% range (some towards 60%).

How has Choice been able to avoid the losses to the level the other hotels were sustaining?

According to the company, hyper-local travel helped its performance over the course of the most solitary months of the pandemic.

Per industry sources, over 2,000 of the Choice Hotels’ U.S. locations are near beaches or national parks—both of which became extremely attractive destinations for social distancing excursions.

But while hotels have been impacted considerably, many have pushed forward with development.

For example, Hilton expects its full year net unit growth to be between 4.5% and 5%. In fact, the only hotelier to completely fall out of the Top 100 for this year was Wyndham Worldwide. This was mainly on the count of, in addition to a revenue hit, being the only one of the big hotel groups to post a net loss in hotel units (through the end of Q3 2020).

Just Beyond the Top 100 (We Need More Room!)

We wish the Top 100 could cover more than 100.

It seems like every year it gets tougher to make the ranking.

There are literally thousands of noteworthy franchise concepts out there. So, inevitably, in ranking only 100, there are going to be great concepts that don't make the cut.

Here's some more fran-tastic faces that we want to recognize for continuing to make their mark in an incredibly diverse and ever-changing industry.

Next up in our report is our 2020 Franchise Year in Review (aka the COVID Impact).

Highlights include the answers to the questions:

• What were the factors that allowed certain franchises to mitigate coronavirus-related losses?
• How did franchisors maintain a sales funnel without the presence of their traditional in-person channels post-February?
• Why would a couple become franchisees in the midst of a pandemic?

You can also travel 'Down Under' to our franchise industry spotlight for the country of New Zealand!

The sections of the report can be accessed via the links above, as well as with the “previous” and “next” buttons at the bottom of each report page.