Now in its 36th year, the 2015 ranking process began in July 2014. Aire-Master participated in Entrepreneur’s survey and each franchise submission was entered into a data analysis.
There were 927 franchisors that made the first cut. The Franchise 500 list was then selected based on financial and statistical data from July 2012 – July 2014. Only franchisors that supplied a full Franchise Disclosure Document (FDD) or Canadian Disclosure Document and whose information was verified by Entrepreneur can receive a listing.
Franchisors must have a minimum of 10 units, with at least one franchise located in the United States. The franchisor must be seeking new franchisees in the U.S. and cannot be be in Chapter 11 at the time the ranking is compiled.
All franchises, 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.
They also consider the number of years a company has been in business and the length of time it’s been franchising, startup costs, litigation, percentage of terminations and whether the company provides financing. Financial data is analyzed by an independent CPA.
Entrepreneur does not measure subjective elements such as franchisee satisfaction or management style. The objective factors are plugged into their exclusive Franchise 500 formula, with each eligible company receiving a cumulative score.
Franchises are listed according to industry categories. Ranked companies are shown with their rank listed next to their name. Entrepreneur also lists unranked franchises on the list for prospects that may be searching for a specific company.