In case you have an entrepreneurial spirit, and you have the capacity to invest, or if you don’t have any of these but want to know about the 11 fastest growing franchises of 2015, then the following few pages should give you enough information about this.
Business ideas originally arise from the intent to fulfill consumer needs which can be basic needs like food, water and shelter or latent needs like having more comfortable lives, easy food, effortless workouts, and more. There are people who see these as business opportunities and set out to fulfill these demands, and thus businesses are formed. Businesses satisfy consumer demands and in the process make money. They are an important cog in the socioeconomic machine as it helps in creating jobs and wealth.
As businesses grow, the ones dealing with retail consumers have to scale up their operations and expand to more locations. As the markets that they serve become saturated, companies have to look beyond these markets to capture a wider consumer base. A business that expands creates a more visible brand and gets opportunities for better financing and a larger consumer base.
Expanding requires capital expenditure and other resources. For example, when McDonald’s expanded beyond its first restaurant in San Bernardino, that might have involved quite a lot of work, like scouting for and buying land, complying with local rules and regulations, construction, and establishing a local supply chain. For a company like McDonald’s, it makes sense to outsource the work of opening new restaurants and keep its corporate brand focused on products.
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This is where the concept of franchise originates. It’s a win-win situation. Franchises create a partnership between two entities: the franchisor, which has a brand and a product, and the franchisee, who has resources like local market knowledge and startup cash. This partnership infuses required capital into the business, lets the franchisee use the brand name, and in turn increases the consumer base. It lets the businesses expand its operations rapidly at multiple locations. For some businesses, franchising is their only way into a foreign market, as many countries require local involvement for a business to be established.
The franchising industry today has grown substantially. A person in India craves a hot brew from Starbucks. The franchise industry’s growth in recent decades has only highlighted its relevance to current business environment. According to a report by Global industry Analysts Inc., the size of the global franchise industry will soon be $3.96 trillion. In the U.S.A. this industry outperformed the rest of the economy and added 200,000 new jobs in 2014 (IHS Global Insight Report). In 2014, we also published an article on the profitability of franchising, the Top 10 Most Profitable Franchises in 2014.
Though this industry is growing, information about the franchises is limited to number of stores, startup costs, and other such financials. However, not much data is available regarding profitability of the franchisor or the overall turnover. An important criterion which decides the growth of a franchise is the number of new stores that have been added in 2015. We have included only those franchises for which the data is available in the public domain. The information has been taken from individual websites of the franchises and from industry specific sources like Entrepreneur. Since we are considering the fastest growing franchises of 2015 we considered data from 2014 and 2015. Only those franchises were considered who at least have 100 stores as of 2015. We ranked the stores based on following criteria:
1. The percentage increase in number of stores — It is important to know the expansion made by these franchises over the previous year. It normalises the effect of larger base number of stores. We are giving it a weight of 30%.
2. The absolute number of stores added — The number of new stores added over the previous year would definitely give us an indication about the intent of the franchisor in expanding their franchise to more markets. Moreover, these numbers can help us identify the real big players in this sector when we are talking about global scenario. We are giving weight of 70% for this ranking criteria.
Based on these scores here is the list of 11 fastest growing franchises of 2015.
11. Marco’s
Number of Stores: 607
Store Growth: 16%
Number of Stores Added: 84
Year of Establishment: 1978
Marco’s proudly claim to be the only pizza chain founded by an actual Italian among the top pizza chains in America. Since its opening in 1978 in Toledo, Ohio, Marco’s has grown to become one the famous pizza restaurants. Their website claims that the startup cost is between $221,592 to $421,592, and the franchisee can earn an income which would be about $111,866 per year. They are planning to open 400 more stores by the end of 2016 and have plans to expand to developing markets like India.
10. Pop-A-Lock
Number of Stores in 2015: 514
Store Growth in %: 17%
Number of Stores Added over 2014: 74
Year of Establishment: 1991
Initial Investment: $100K – 135K
Who might have thought that locksmith can be turned into a franchise business, and a growing one! Pop-A-Lock has services specific to automotive, residential and commercial locksmithing. They provide training to the new franchisee’s staff and support in terms and advertising and marketing.
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9. The Joint Corp.
Number of Stores in 2015: 262
Store Growth in %: 18%
Number of Stores Added over 2014: 40
Year of Establishment: 1999
Initial Investment: $142K – 337K
The Joint Corp. was established in 1999, the company specializes in providing clinical services related to joint pain. Their business model seems to be based on providing customized preventive care plans which are affordable and available to the customer through convenient locations. Also they claim to cost about half the industry average per appointment.
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8. Kona Ice
Number of Stores in 2015: 677
Store Growth in %: 18%
Number of Stores Added over 2014: 103
Year of Establishment: 2007
Initial Investment: $114K – 129K
This ice-cream-on-wheels concept boasts of cleaner and appealing experience while buying your shaved ice which can be customized as per the customer’s tastes. It also engages itself in social activities like fundraising events, which help in increasing their brand visibility. It boasts lower initial investments and higher returns in comparison to other fast food chains like Taco Bell or McDonald’s.
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7. Wingstop Restaurants
Number of Stores in 2015: 785
Store Growth in %: 18%
Number of Stores Added over 2014: 121
Year of Establishment: 1994
Initial Investment: $192K – 688K
Wingstop serves chicken wings along with aviation themed ambiance. They operate in the U.S.A. Russia, Indonesia, Mexico, Singapore and Philippines. Unlike Buffalo Wild Wings, much of Wingstop’s revenue comes from carryout orders, and as such they operate smaller outlets. Their immediate target is to open 2500 outlets in the U.S.A.
6. Mathnasium
Number of Stores in 2015: 677
Store Growth in %: 19%
Number of Stores Added over 2014: 110
Year of Establishment: 2002
Initial Investment: $90k- $137K
Mathematics is an integral part of our lives, from buying vegetables to budgeting monthly expenses. However, most of us might have dreaded this subject throughout our academic years. Mathnasium wants to intervene in that through customized learning plans based on individual children’s needs. They also have a trademarked “Mathnasium Method.”
5. Buildingstars
Number of Stores in 2015: 641
Store Growth in %: 20%
Number of Stores Added over 2014: 109
Year of Establishment: 1994
Initial Investment: $2K – 52K
Buildingstars provides commercial cleaning services. Their franchise model boasts a lower initial investments and better training methods. They focus entirely upon office spaces to keep the work schedule predictable. They also provide assistance in business development and operations through training of the franchisee’s staff. Out of all the franchises on our fastest growing franchise of 2015 list, this has one of the lowest initial investments.
4. Cruise Planners
Number of Stores in 2015: 2,072
Store Growth in %: 18%
Number of Stores Added over 2014: 314
Year of Establishment: 1994
Initial Investment: $2K – 23K
This travel agency focuses on offering affordable and customized vacations. That doesn’t sound different than the others, but they stand out because they are the largest home-based travel agency in the U.S.A. Their business model relies on franchises which are low investment with commissions which are among the highest in the travel industry. The amount of new franchises added over the past one year indicates the strength of their franchise model.
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3. Engineering for Kids
Number of Stores in 2015: 141
Store Growth in %: 30%
Number of Stores Added over 2014: 33
Year of Establishment: 2009
Initial Investment: 38K-$58k
This company aims at introducing engineering, science, math, and problem solving to kids, through unconventional ways of learning like workshops. Though it’s the youngest entrant to our list of fastest growing franchises, it has shown impressive growth over previous years and has grown its base. They plan to add even more stores in coming years and growing internationally. They have low initial investments and the startup time is short.
2. Subway
Number of Stores in 2015: 44,538
Store Growth in %: 3%
Number of Stores Added over 2014: 1,390
Year of Establishment: 1965
Initial Investment: $117K – 263K
50 years in business, more than 40,000 outlets, 111 countries and growing, Subway is the largest restaurant chain in the world. Even with so many restaurants, they have shown aggressive expansion intent and have added 1,390 new locations.
1. 7-Eleven Inc.
Number of Stores in 2015: 57,500
Store Growth in %: 7%
Number of Stores Added over 2014: 3,979
Year of Establishment: 1927
Initial Investment: $38K – 1M
This convenience stores chain surely deserves to be called the fastest growing franchise. It has 57,500 outlets, more than all the other franchises in this list put together. Also their growth is phenomenal, considering it’s the oldest franchising company on our list. According to their website, 7-Eleven adds one store every three and half hours. So by the time you read this, they’ve added few more stores. They are spread across 18 countries, and have added 3,979 new locations over the previous year, making it undisputedly the fastest growing franchise of 2015.
