Ten Largest Restaurant Franchisors by System-Wide Sales

SALT LAKE CITY (Blue MauMau) - Experts say that the larger the franchise system, the more one finds investment safety, a deeper talent pool of professional support and incredible purchasing power for nationwide branding that can contribute to individual franchise operations.

The ten largest restaurant franchise systems, whether full or limited service, are ranked by franchise-wide sales.  The number of domestic restaurants in a franchise system have been included and average restaurant sales, or rather what the industry calls sales per store. In the list below franchise-wide sales is divided by number of franchised restaurants in the system.

Professor Scott Shane, Professor of Entrepreneurial Studies at Case Western Reserve, who has conducted statistical studies and written books on choosing a franchise, thinks that older and larger franchise networks give an edge of safety in the business game of chance. Shane states, "If a franchisee candidate wants to be more confident that a franchisor will be there to provide its part of the arrangement towards the end of the ten year contract that they are about to sign, then they should look for systems that have been in operation for more years, systems that are part of businesses that have been in operation for more years, and systems with more total outlets."

Shane continues, "The probability that a franchisor will be in operation in the future to support you as a franchisee increases dramatically with the increased age and size of the franchise system."

With roughly three times the sales volume of its closest competitor, McDonald's ranks as the largest restaurant franchise chain in the United States in 2007—bar none.

Why is size important?

With over two decades of creating franchise systems and educating franchise buyers, Craig Slavin, president of Franchise Architects and Franchise Navigator, agrees with Shane. The sales volume of a McDonald's system manifests a number of big benefits. "For one, brand awareness," declares Slavin. "These companies are doing national advertising, so when a franchisee comes in, the franchise owner can leverage his efforts and investment with the advertising that has been done and the brand's reputation with consumers," he says.

According to Slavin, there's another big benefit of these behemoth franchise chains. "These companies have evolved to a point where they are pretty sophisticated in terms of their brain trust of professionals," says Slavin. "Provided they don't get sunk into the syndrome of the bureaucracy where it takes so long for information to reach its destination from the field to the top and the top to the field, the franchisee has the ability to come in and leverage the wealth of knowledge, including training programs."

Editor's update: This is a repost from a few days ago. The original data had accidentally left out Subway and Dunkin' Donuts. A breakdown of U.S. Franchise Sales, as opposed to total system-wide sales of company-owned and franchised units, has been added. We think franchise investors will find the franchise-wide sales of interest.

Related reading:

• 10 Points of Probability in Selecting a Successful Franchisor
• FT Top 200, 200 largest franchise systems ranked