Our Methodology
The most effective and profitable retail outlets tend to grow into every available market, as savvy business owners look to leverage the brands business model, suppliers, and marketing prowess to build their own business. As such, would-be store owners often look at a franchise brands growth history as a sign of financial and operational performance.
We analyzed the unit growth trends of retail franchise businesses to surface those that consistently outpace the competition in new unit growth rates.
Where Does the Data Come From?
Every franchise business in the U.S. publishes franchise unit opens and closes in each state annually. The data can be found in the brands Franchise Disclosure Document (FDD), which is made available to every potential franchisee when contacting franchise brands about opening a new location or franchise unit. In Item 20, every FDD must include the number of franchise units opened (and closed) by state over the past three years. We collect this data and maintain it to use the most recent five years for our analysis.
How Do We Measure Growth?
To compare growth between franchise brands, we analyzed net units opened (new units opened, less any unit closed) annually during the five-year period from 2018 through 2022. We used the average number of net new units annually out of the previous years' total units to determine the fastest growing franchise brands. To minimize the effect of very small, new franchises, we limited our data set to those franchises with at least 100 units in the most recent year.
(Net growth is one of the best measures of franchise success, but it excludes the rate at which franchise units fail, for whatever reason. See our franchise success rate list for continuity trends.)
Why It's Important
Evaluating franchise opportunities is a complex process, but the bottom line is an effective, profitable franchise system will grow as new business owners take advantage of the opportunity to build their own business. Growing franchise brands afford business owners the chance to capitalize on the momentum and start their own business while the brand is experiencing improving performance, so franchise buyers look at above average growth rates as a signal of positive franchise system performance when evaluating opportunities.
Want to see more available franchises? See our Franchise Directory.
