Franchise Facts and History - All You Need to Know

Franchise Facts and History - All You Need to Know
ByBojan Jovanovic
September 24,2021

Top Franchise Statistics: Editor’s Choice

  • Isaac M. Singer is the Godfather of the modern franchising model.
  • McDonald’s is the world’s biggest franchise with more than 38,000 restaurants.
  • A 50% of stake in Domino’s Pizza was once traded for a used VW Beetle.
  • Anytime Fitness has a gym in Antarctica.
  • There are 38 million ways to make a Subway sandwich.

History of Franchising

When did franchising actually start? There are many different interpretations about what constituted the earliest form of franchised operations. Some say it was during the 19th century, and others trace its origins to 200 AD. But the correct answer is the Middle Ages.

Back then European monarchies allowed noblemen and the church to manage lands that belonged to the Crown. They were charged with protecting the territory and collecting taxes. The nobles granted local farmers the right to use a piece of land in exchange for royalties. This is considered the first franchise operation in history.

Fast forward a few centuries and the world was adding another continent to the map that quickly became a brand new venue for business expansion. In the 1850’s, Isaac M. Singer was in the business of making sewing machines. He had a brilliant product but lacked capital for mass production. He devised a business model in which he sold licensing fees to people that wanted to sell the machines and teach others how to use them. Thus, the oldest franchise in the US was born, and others soon followed. 

You might’ve heard about Coca-Cola. In 1886, John S. Pemberton invented the now famous beverage and wanted to expand his business. Just like Singer before him, Pemberton licensed his drink to a select group of sellers. Coca-Cola quickly became the biggest franchise in the world, at least when it comes to fizzy drinks.

The real boom for the franchising industry came during the baby boom era. World War II was over, the world was getting back on its feet, and people needed lots of new products and services. This gave rise to a string of new franchises throughout the 1950s and 1960s, including one that would eventually morph into the biggest fast food chain in the world - McDonald’s.

One of the more interesting McDonald’s franchise facts relates to how it evolved from a humble burger stall to a chain of restaurants. The person credited for this success wasn’t one of the McDonald brothers but Raymond Albert Croc. 

Before stumbling onto McDonald’s, Croc was selling milkshake mixers. One day, he learned that his regular customers, the McDonald brothers, managed to use eight of his machines at the same time like a conveyor belt. Coincidentally, the brothers were looking to turn their business into a franchise. It was a match made in heaven, and just a few years later, there were 500 restaurants across the United States. Today, about 80% of all McDonald’s locations are franchises.

The Biggest Franchises of Today

Franchising today is bigger than ever. Some of the most popular products and places are part of global franchises. You can pick almost any random product in a convenience store, and there’s a good chance that it was produced by a franchise. As a matter of fact, it’s highly likely that the very store you’re browsing through is another franchise. 

Among those are some truly astonishing franchises and brands. Some of them have tens of thousands of locations and are as old as the US itself. 

McDonald’s is still the largest franchise in the world.

(Franchise Direct)

The world’s biggest franchising success story is more than 60 years old. McDonald’s now has more than 38,000 locations worldwide and employs nearly two million people. In an effort to meet the needs of customers, the food franchise is evolving by investing in tech. In 2019 alone, the company struck a $300 million acquisition deal with a personalization and decision logic technology firm. That was followed by the purchase of stakes in several companies that develop mobile apps, mobile payment systems, and even artificial intelligence.

Subway has more locations than McDonald’s.

(Business Insider)

There are more than 41,000 Subway restaurants in the world. That means that the company opened, on average, two new restaurants every day since it was founded in 1965. The company also sells 7.6 million sandwiches every day.

7-Eleven owns more than 71,000 units.

(TBSeFM News)

McDonald’s might be the most popular franchise, but the top spot for the number of locations goes to the retail chain 7-Eleven. The company recently opened its 71,100th store, which is located in South Korea's capital, Seoul. 7-Eleven has stores in 17 countries across the globe

The Hertz Corporation operates in more countries than any other franchise. Its offices are located in 150 states across the globe.

(Franchise Direct)

Founded in Chicago in 1918, this car rental franchise is now present on all continents with more than 10,000 units. It was originally known as Rent-A-Car Inc. with a humble offering of just a dozen Model T Fords.

By opening 516 properties throughout 2019, Marriott International retained its place at the top of the hotel industry.

(Franchise Direct)

One of the more important franchise facts about the hotel industry involves Marriott International. This hotelier spent the last seven years at the top of that industry. Throughout 2019, the company signed 815 hotel deals.  

The Philadelphia Phillies are the oldest one-city, one-name sports franchises in the US.

(Wikipedia)

This professional baseball team was founded in 1883 and has been playing in the National League ever since. It has never changed its name or the city where it’s located, a very unique characteristic for a sports franchise.

Anytime Fitness is the first franchise represented on seven continents.

(Franchise Direct)

It may not be considered the best franchise in the fitness industry, but Anytime Fitness has really gone somewhere nobody else dared to go. To Antarctica. Just because there’s too much ice, doesn’t mean the company's growth has to stop. By opening a studio on the cruise ship Magellan Explorer, the franchise owners can say they have the coolest gym in the world.

(Franchise Direct)

The surest thing in the franchise business is a food and beverage franchise. People may not need to rent a car every day, but they’ll always need to eat.

Franchise fun facts

Every business has a story, and franchises are no different. Some of the more unusual stories come from businesses that became part of the franchising industry. And, like any business, a franchise will need to adapt to overcome hurdles along the way, more often than not influencing its competitors to do the same. From name changes and recipe changes to the most outlandish events in modern business, here are some statistics and very unusual facts about franchising.

  • There are more than 750,000 franchises in the United States alone.
  • Franchises in the US provide employment to more than 8 million people.
  • Of all franchise workers in the US, 50% are employed by quick service restaurants.
  • The McDonald’s golden arches logo isn’t the same everywhere. In Israel’s Tel Aviv, the traditional yellow and red logo was trumped by the blue and white of the Isareli flag to distinguish its kosher restaurants. In Sedona, Arizona, the arches are turquoise to blend in with the local landscape. And in Russia, both the name of the company and its products are written in Cyrilic. 
  • Not only is McDonald’s the largest franchise, it’s very versatile. This fast food franchise adapts its menu to the tastes of different countries. If you visit a McDonald’s restaurant in Japan, you’ll be able to find at least 50 items on the menu unique to this country. At one point, those restaurants offered black burgers that were supposedly delicious despite the unappetizing look.
  • The urban legend about Coca-Cola containing cocaine is real. The original formula that the company founder’s came up with contained two medicinal ingredients: coca leaf extract and kola nuts. It’s difficult to say how much cocaine was used in the formulation of the fizzy drink in the early days. After 1904, the company started using so-called spent leaves that only contain traces of cocaine. Coca-Cola eventually switched to cocaine-free coca leaf extract.   
  • A well known franchise fact is that a name change can lead to better business. 7-Eleven used to be called Tote’m because some of their stores had Alaskan totem poles at the entrance. The name was changed when the company introduced a new working schedule from 7 a.m. to 11 p.m., seven days per week.
  • The founders of Pizza Hut, Dan and Frank Carney, chose that name because they couldn’t afford more letters for the restaurant’s sign. Some still wonder what the name of the famous pizza place would have been if the founders had more than $600 in their pocket.
  • Some of the Subway franchise facts are quite remarkable. The famous BMT sandwich got its name from the Brooklyn-Manhattan transit system. The company once hosted a fashion show, all of the Subway locations smell the same, and there are 38 million combinations to make a sandwich.
  • Taco Bell was the first fast food restaurant chain offering food certified by the American Vegetarian Association. The company got its certificate in 2015, and now there is a dedicated vegetarian menu available.
  • You can order a burger in more than 250,000 ways at Five Guys. There are that many topping combinations and add-ons.
  • Speaking of Five Guys franchise facts, did you know that former US president Barack Obama is a big fan? In 2011, he was spotted at several Five Guys locations in Washington, DC, ordering lunch for himself and his colleagues.
  • A lot of people have a sweet tooth, especially for doughnuts. Dunkin’ Donuts, for example, serves 3 million customers a day, many of which are subscribers to the company’s coffee delivery service.
  • Since it was founded in 1945, Baskin-Robbins expanded its initial offering of 31 ice cream flavors to more than 1,000. Vanilla is still among the most popular choices.
  • Another interesting franchise statistic was recorded in 2013, when Friendly’s Ice Cream served  794 people at its headquarters. The event made it into the Guinness Book of Records as the “world’s biggest dessert party”.
  • James Monaghan, one of the brothers that founded Domino’s Pizza, could’ve been a millionaire. Instead, he gave his 50% stake in the company to his brother in exchange for a used Volkswagen Beetle. 
  • Kentucky Fried Chicken founder Harland Sanders used to practice law and deliver babies, among many other odd jobs he had before becoming a franchise owner.
  • On the healthier side of franchising facts, Gold’s Gym was among the first companies in the fitness industry to become a franchise. But it wasn’t the original owner Joe Gold that turned it into a corporation we know today. Thanks to Ken Sprague, and later Peter Grymkowsy, the failing business turned a profit, expanding into a franchise with 500+ locations.
  • Steve Kuhnau founded Smoothie King when he concocted a drink that even lactose-intolerant people can enjoy. He named it smoothie.
  • Martha Matilda Harper was not only the first woman in the franchise business, but her hairdressing business was the first commercial franchise of its kind. Each of the salons were run by a woman, and Harper ended up opening 500 locations across the country.

 

Frequently Asked Questions
How much money do you make owning a franchise?

There are many factors that determine how much money you’ll be able to make from taking up a franchise. So far, the food and beverage business has shown to have the highest potential for turning a profit, with an average annual income of $120,000. It also helps if you own multiple units. The initial investment might be higher, but so will your franchise revenue.

What are the top 10 franchises?

Here’s a franchise fun fact: the list of top franchises is heavily dominated by fast food chains. Among those are McDonald’s, KFC, Pizza Hut, Burger King, Domino’s Pizza, Dunkin’ Donuts, and Subway.

What is the most successful franchise to own?

The food and beverage industry is by far one of the best industries for franchises. The investment doesn’t have to be big. Daily running costs are lower than in other industries, while the turnover is undoubtedly the best.

What are 3 advantages of a franchise?

There are many advantages to having a franchise. It’s a proven recipe for growth and offers a source of capital with investors more likely to invest into a franchise establishment than smaller  businesses. A franchise also offers a way to overcome great distances. These franchise facts have helped many in the business world make money.

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Women account for 50.8% of the US population, hold 57% of all undergraduate degrees, and approximately 60% of all master’s degrees. And even though they hold about 52% of all management-level jobs, American women cannot keep pace with men in terms of representation when it comes to top leadership roles.  As male vs. female CEO statistics show, it’s the profit and loss roles or P&L responsibilities such as leading a brand, unit, or division, that set executives on the track to becoming a CEO. On the other hand, women who advance into C-suites - the “chief” jobs in companies - typically take on the roles such as head of human resources, legal, or administration. Although all of these functions are extremely important, the line of work they focus on doesn’t involve profit-generating responsibilities, which rarely makes them a path to running a company. Why does the percentage of CEOs that are female remain low in all parts of the world? There isn’t a simple answer to this question. Several studies have shown that it’s the fusion of work-life constraints, early professional trade-offs, and firmly established attitudes towards women in power and the skills and traits that make a good leader that can explain why the careers of equally ambitious and capable men and women often take such different turns. Let’s take a look at some of the most interesting findings. Male vs Female CEO Statistics - Editor’s Choice Female CEOs are running 41 Fortune 500 companies. There are two Black women among the Fortune 500 CEOs. Women made up only 5% of the CEOs appointed in 2020 globally. At the CEO level, men outnumber women by approximately 17 to one.  59% of male employees aspire to become CEOs versus 40% of women. 77% of women say the biggest obstacle to gender equity at the workplace is the lack of information on how to advance. Between 2015 and 2020, the share of women in senior vice president roles in the US increased from 23% to 28%. (McKinsey & Company) Over the same period, the percentage of women in the C-suite went up from 17% to 21%. All women, especially those of color, remained significantly outnumbered in senior management positions. However, prior to the start of the coronavirus pandemic, the representation of female workers in corporate America was slowly trending in the right direction.  According to 2020 statistics on female CEOs in the United States, 21% of C-suite members were women.  (McKinsey & Company)  Based on the survey results published by McKinsey & Company, there’s a leaky pipeline for women in leadership. In 2020, female workers accounted for 47% of entry-level positions, 38% of management roles, and 33% senior management/director roles. Women were entrusted with under one third (29%) of all vice president positions in American organizations. For every 100 men who got promoted to a managerial role, only 85 women advanced to the same position, based on the 2020 data.  (McKinsey & Company) This gap was even larger for women of color as only 71 Latinas, and 58 Black women received a promotion. Consequently, women remained underrepresented at the managerial level holding just 38% of manager positions, while men accounted for 62%. Male vs female CEO statistics from 2020 indicate that 39% of senior-level women burned out compared to 29% of men. (McKinsey & Company) Furthermore, 36% of women felt pressured to work more, in comparison with 27% of men. At the same time, 54% of C-suite women reported that they constantly felt exhausted, and so did 41% of men in similar positions. More than 50% of women in senior leadership roles promote gender and racial equality at work, in comparison with approximately 40% of male top executives. (McKinsey & Company) Women in leadership positions are more likely than men in senior-level roles to take a public stand on racial and gender diversity and champion the advancement of employee-friendly programs and policies. Women CEOs are also more likely to sponsor and mentor other female workers. According to the results of a recent survey, 38% of women in senior-level positions currently mentor or sponsor at least one woman of color, compared to only 23% of men in the same roles.   Female CEOs are running 41 Fortune 500 companies. (Fortune, Statista) In 2021, the number of women appointed to CEO positions in America's 500 highest-grossing companies reached an all-time high. However, the new record still only translates to approximately 8% of female representation at the top of the country's largest public businesses.  On the plus side, the number of women CEOs of Fortune 500 companies almost doubled in comparison with 2018 when there were 24 females leading the nation’s biggest businesses. Calls for diversity and inclusion in the highest echelons of America’s business world are starting to bear fruit as the number of female Fortune 500 chief executive officers increased for the third consecutive year. The top five biggest female-led Fortune 500 businesses as of August 2021 are CVS Health (rank four), Walgreens Boots Alliance (rank 16), General Motors (rank 22), Anthem (rank 23), and Citigroup (rank 33).  Speaking of women in leadership roles, statistics show that there are two Black women among the Fortune 500 CEOs. (Fortune) For the first time, two Black women are running Fortune 500 businesses - Roz Brewer of Walgreens Boots Alliance (rank 16) and Thasunda Brown Duckett of TIAA (rank 79). Before Duckett and Brewer started their new jobs in 2021, only one Black woman - Ursula Burns, former Xerox chief - had ever been appointed CEO at a Fortune 500 business on a permanent basis. After Burnes stepped down from the role in 2017, and, with the exception of Bed Bath & Beyond's Mary Winston, who worked as interim chief for a few months in 2019, Black female chief executive officers have been missing from the Fortune 500 list ever since. Citigroup CEO Jane Fraser is the first woman to run a major Wall Street bank. (Fortune) Fraser’s appointment marked huge progress for the financial industry. Much like Dick's Sporting Goods chief Lauren Hobart, Clorox chief Linda Rendle, new Coty CEO Sue Nabi, Walgreens Boots Alliance’s Roz Brewer, Thasunda Brown Duckett of TIAA, and CVS’s CEO Karen Lynch, Fraser took over from a male CEO. Statistics on Fortune 500 CEOs by gender reveal that there were only 37 female and 463 male chiefs leading America’s highest earning businesses in 2000. (Fortune) The number of women in CEO positions in the Fortune 500 hasn’t been growing steadily throughout the last two decades. There were 24 female chiefs in 2015, 21 women CEOs in 2016, and 32 women running Fortune 500 businesses in 2017, while that number dropped to 24 in 2018.  At the median, 16 female CEOs earned $13.6 million in 2020, in comparison to $12.6 million for the 326 men included in a study. (Equilar) According to a study published in May 2021 comparing a male CEO salary vs. a female CEO salary, women have outpaced men in total pay but remained underrepresented in executive positions. Equilar’s study indicates that Lisa Su, the chief executive officer of Advanced Micro Devices, was the highest-paid woman for the second consecutive year and the highest-paid CEO overall in 2020.  Globally, women made up only 5% of the CEOs appointed in 2020. (Heidrick & Struggles) The highest percentage of newly-appointed female CEOs was in Ireland (15%), while the lowest was in Brazil (0%). This is according to a paper that analyzed the backgrounds of chief executives leading 965 of the largest companies in 20 markets around the world. It sought to identify the skills and experience that shaped their path to the top while taking different male vs. female CEO statistics into account.  At the CEO level, men outnumber women by approximately 17 to one.  (Morningstar) According to a study that explored the gender gap in US companies, the number of male executive officers is seven times higher than the number of women holding the same positions. More than 50% of the companies analyzed didn’t have a single female on their lists of executive officers. Jackie Cook, the author of the Morningstar report, found that online retail giant Amazon didn’t have any women among its highest-paid executives as of 2020.  Women who negotiate for raises and promotions are 30% more likely to be considered as "too aggressive" or "intimidating". (Business Insider) Speaking of male managers vs. female managers, statistics reveal that women who don’t negotiate at all are 67% less likely to receive the same negative feedback. The proportion of women in senior management roles increased from 20% in 2011 to 29% in 2020, globally. (Grant Thornton) As 2019 saw a jump of 5% compared to 2018 (amounting to a total of 29%), 2020 represents a leveling off of the progress made during the previous year. This lack of movement doesn’t necessarily reflect a failure of companies to address the existing gender gap. Globally, the proportion of companies with at least one woman in senior management was 87% in 2020.  (Grant Thornton) The number of female CEOs and senior managers has risen by almost 20 percentage points over the last few years. For comparison, this figure stood at 68% in 2015 and 68% in 2017.  77% of women say the biggest obstacle to gender equity in the workplace is the lack of information on how to advance. (Working Mother Research Institute) Only 41% of female survey participants, as opposed to 64% of male respondents, said they have a network of coaches, mentors, and sponsors offering them career guidance. 37% of women versus 64% of men said that their companies provide information on career paths that lead to executive roles. (Working Mother Research Institute) Additionally, women CEO statistics indicate that 74% of female employees understand what the specific requirements are for advancing to the highest-paying roles in their companies even though they don’t receive this type of information directly.  60% of women believe they have the same opportunities to advance as anyone else at their workplace versus 74% of men.  (Working Mother Research Institute) Similarly, 65% of women express they are satisfied with the way their careers are progressing, and so do 78% of men.  Male vs female CEO stats reveal that 59% of male employees aspire to become chief executives versus 40% of women.  (Working Mother Research Institute) Of those women who aspire to become CEOs, 6% are first-level managers (as opposed to 13% of men) and 39% are executives. The same goes for 40% of men hoping to take on the role of chief executive officer.  Businesses with high representations of women in leadership roles had a 35% higher return on equity and 34% higher total shareholder return in comparison with male-dominated companies.  (Catalyst) Female vs male CEO statistics compiled by an NGO during a review of 353 Fortune 500 companies show that the differences were most apparent in facial services, consumer discretionary, and consumer staples industries.
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