last updated 29/10/2019
Food franchises mostly growing as other categories boom
last updated 29/10/2019
8 October 2019 – A ranking of global franchises shows which brands are performing most strongly and identifies sectors to watch
The latest version of the Franchise Times Top 200+ shows that the biggest names in franchising continued to grow last year. Overall group sales grew by just over 4 percent and, had it not been for two big names which had a pretty bad year, would have matched the 4.6 percent recorded last year.
Who were the two losers? Subway, which reported global sales declines of $1.1 billion, and real estate company RE/MAX, which was down by $862 million (all values shown are US$).
The Top 200+ is a ranking of the largest franchise systems based in the United States according to global systemwide sales. Produced by the USA's Franchise Times, it actually covers 500 franchise brands and is based on more than 20 years of research and enables industry-watchers to identify trends within and across categories.
This year, for example, one interesting change was that Subway was bumped out of the top five for the first time since 2009 by a non-food company – Ace Hardware. Ace sales were $16.6 billion, while Subway ‘only’ achieved $16.2 billion from its 27,798 US stores and 42,427 stores outside the US. By contrast, Ace credited its growth to strong same-store sales, additional locations and a near 50 percent growth in online orders.
Domino’s, in 7th place, saw the best sales growth in the top 10 with 102 percent representing an additional 1.2 billion. Taco Bell, due to open its first store in New Zealand shortly, moved up two places into 10th spot, with overseas outlets now slightly outnumbering US ones (7,072 to 6,588).
Among restaurants, the strongest categories were chicken and Mexican (both of which are currently seeing growth in New Zealand with the launch of franchise brands such as Winner Winner, Bird on a Wire and Mexico).
Main growth categories
The strongest growth category for the year was health and medical, which grew by 14.5 percent followed closely by personal services. Fitness and education both played a major role in these rises.
Perhaps less predictable areas of growth were hair care, trampoline parks and disaster restoration, all of which achieved double-digit growth in 2018, as did collision repair and senior care.
All in all, says Franchise Times, ‘The vitals of the Top 200+ say a lot of good things about the economy. So while there continue to be growers taking market share, along with plenty of challenges from labor to traffic and quickly evolving consumer demands, things are looking pretty darn healthy.’
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