The 10 Most Popular Franchises in the U.S.

Everyone seems to have a dream to be on top of the next hot trend. Be it food, service or fashion, once something becomes hot, many of them go the franchise route. Franchises, for those who don’t know, is for someone who has developed a business concept to allow others to pay the developer the rights for that concept. In return, the franchisee must follow strict guidelines, buying supplies, raw materials and marketing from the developer. It is one of the quickest way to spread an idea using other peoples money yet maintaining some control on the process.

CNN Money recently had a list of the 10 most popular franchises during the last decade. Also listed was their success rate based upon Small Business Administration startup loans being repaid.

#1) Subway: 33,000 outposts in 91 countries. Start up fee: $15,000
Avg. start up loan : $170,928 Failure rate 7%
Subway’s high success rate and relatively low start up fee has made this franchise the most popular of the decade. Now taking on the breakfast market.

#2) Quiznos: 5000 outposts. Start up fee: $25,000 Avg. start up loan: $144,458
Failure rate: 25%
Quiznos has just settled 4 class action lawsuits brought on by its franchise holders regarding pricing, royalties, and fees. Not everything works in “franchise-land”. Hoping to jump start things, they have just lowered their start up fees for some to $5000.

#3) UPS Store: Start up fee: $25,000 Avg. start up loan: $146,943 Failure rate: 12%
UPS Stores were launched when UPS purchased the old Mail Box Etc. stores in 2001. Here is another situation where the franchisees are not happy. Some of those old Mail Box Etc. franchise holders are taking UPS to court in Los Angeles over guess what? Pricing, royalties and fees! Are we getting a pattern here.

#4) Cold Stone Creamery: 1400 locations. Start up fee: $42,000 Avg. start up loan: $233,687 Failure rate: 31%
What can be so difficult about serving cold, creamy ice cream with a lot of candy fixins? This franchise got started 20 years ago in Tempe, AZ and was bought out in 2007 by a company that owns another sandwich franchise…Blimpe. The high start up cost, high overhead and retail prices that are sometimes tough to swallow has put the skids lately on this concept.

#5) Dairy Queen: 5700 locations. Start up fee: $35,000 Avg. start up loan: $328,383
Failure rate: 8%
Turning 70 this year, this franchise is headquartered in Minneapolis and was bought out in 1998 by Warren Buffet and Berkshire Hathaway. For those going to Berkshire’s convention in Nebraska, everyone attending gets a coupon for a Dairy Queen. They’ve done a nice job adding food to their soft serve mix the past 10 years. Some of their new building concepts have even gone retro/back to the 50’s in design.

#6) Dunkin Donuts: 9000 locations in 31 countries. Avg. start up loan: $582,726
Failure rate: 8%
Dunkin Donuts are often paired with a Baskin Robbins Ice Cream shop, which is another one of its franchises (10% failure rate on Baskin Robbins). Another company that has done an excellent job of reinventing itself with coffee, soup and sandwiches…going beyond unhealthy donuts (unlike Krispy Kreme). I always thought a donut/bagel/ bread (maybe Panera or Big Apple Bagel) would do well in a college town like Bemijdi.

#7) Super 8 Motels Start up loan: $910,476 Failure rate: 4% 2000 locations
#8) Days Inn Start up loan: $1, 023,690 Failure rate : 6% 1900 locations

Both of these are part of the Wyndham Hotel Group…which also own Ramada Inn and Travelodge brands. Super 8 was started in 1974 in Aberdeen, SD with rooms going for $8.88 per night. Lodging as an industry is one of the safer bets in franchising, although it has very high start up costs.

#9) Curves For Women Average loan size: $98,094 Failure Rate: 16% 10,000 locations in 70 countries. 4 million members. This franchise was started in Texas in 1992 and pioneered the 30 minute workout concept. It really peaked around 2005.

#10) Matco Tools: Start up loan: $90,131 Failure rate: 36%
This franchise is one of the least expensive franchises to start with no royalty or licensing fees, and basically using a truck as a store. But with over 1/3 rd of the franchisees defaulting, your territory and a lot hustling and long hours are key to its success.