Top 10 franchises decline in US as others storm ahead
posted on 7th October 2016
The 10 largest franchise brands in the US collectively lost systemwide sales last year, after 16 straight years of gains. McDonald's was top of the list with a massive $5 billion-plus sales drop, while 7-Eleven, Subway, KFC and Pizza Hut also saw significant drops in y/e 2015 sales. However, many of these companies grew substantially outside the US, suggesting that the brands have reached saturation point at home.
The figures come from Franchise Times' Top 200, an annual report on US franchises. The news wasn't all bad, though - the other 190 franchise brands featured had an excellent year, up nearly 7 percent in what the report calls 'the best show of franchising force in 5 years.'
While year-over-year sales dropped at several leading brands, the picture brightened further down th
e list as franchised brands reached new heights with record-breaking sales, significant gains in unit counts and an ongoing push into new corners of the globe.
Outside the eye-popping declines posted by the largest brands, our Top 200+ ranking confirms that, unequivocally, franchised brands continue to grab an ever-growing share of the American economy. This year’s top 200 companies produced a combined $596.1 billion in systemwide sales during 2015.
Based on total worldwide system sales, our ranking rewards systems for how much they sell in a given year, rather than how many units they build. With Hertz dropping out of the Top 200+ and replaced by RE/MAX, the five remaining brands in the top 10 all saw healthy increases during 2015. Burger King added $287 million in new sales, Ace Hardware was up $557 million, RE/MAX added $1.18 billion, Wendy’s gained $405 million and Marriott Hotels and Resorts added $400 million to its top line.
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