SOURCE: AllBusiness

AllBusiness

January 11, 2011 16:13 ET

AllBusiness AllStar Franchise List Reveals 2011's Expected Top Franchise Opportunities

Quick-Service Restaurants Take Top Spots, Affordability Gains Prominence

SAN FRANCISCO, CA--(Marketwire - January 11, 2011) - AllBusiness.com, Inc., a leading online resource for businesses, today announced its third annual AllBusiness AllStar Franchise List ranking the expected top franchise opportunities for 2011. Quick-service restaurants capture the top three spots in AllBusiness' new list (compared to just one of the top three last year).

When compiling the 2011 rankings, the AllBusiness editors considered a number of key business indicators, including growth trajectory, Web visibility, business longevity, and system size. Affordability also played a uniquely important role.

The highest-ranked franchise opportunities for 2011, as reported by the 2011 AllBusiness AllStar Franchise list, are as follows:

1. Subway
2. Dunkin' Donuts
3. Pizza Hut
4. Hampton Inn/Hampton Inn & Suites
5. Jimmy John's Gourmet Sandwich Shops
6. 7-Eleven
7. Jack in the Box
8. Jani-King
9. Servpro
10. Wireless Zone

While the 2010 Franchise Business Economic Outlook prepared by PricewaterhouseCoopers LLP for the International Franchise Association (IFA) predicted franchise growth would be slow in 2010, AllBusiness franchise experts discovered a sense of renewed opportunity, especially in recession-resistant industries such as non-medical companion care for seniors.

Unprecedented volatility had a strong effect on the sector. Of the top 10 companies in 2011's AllStars, half were not in the 2010 top 10. And 82 of the companies in the 2010 list failed to earn spots in the 2011 AllStar Franchise list. Remarkably, seven companies that had been offering franchises only since 2008 managed to become AllStars.

Overall, difficult credit remained the biggest franchise challenge. "In 2010, many franchises announced new initiatives to either bring in new consumer business or to attract new franchisees," said Rieva Lesonsky, editor-at-large and franchise advisor for AllBusiness.com. "Companies that increased franchise units also tended to offer special financing options and incentives."

In particular, franchises with low fees (57 AllStars cost less than $50,000; 118 cost less than $100,000) or those that were home-based (78 AllStars) did well on the 2011 list, as did franchises offering inexpensive products and services. 

In fact, in this era of tight money, the average total cost of starting a franchise in the AllBusiness AllStars top ten runs $200,000 to $1.2 million less than the top ten of competing rankings. To help make franchising even more affordable, the AllBusiness Franchise AllStars list includes exclusive resources on alternative financing sources.

The Top Performers 

  • Subway holds on to the #1 spot for the third consecutive year. Its low-cost, healthful sandwich options (e.g., the $5 foot-long sub) continued to resonate with cash-strapped consumers in 2010. Other notable achievements: continued global expansion (Subway now has approximately 33,000 locations in 90 countries) and the introduction of customizable omelet sandwiches in April -- the first national breakfast program in the company's history -- which grew to account for fully 50 percent of the franchise's revenue in a matter of months.
  • Dunkin' Donuts leaps from #27 in last year's AllBusiness AllStar ranking to #2 this year. Key to its upward mobility on the AllBusiness AllStar list: the "breakfast boom," which Dunkin' Donuts further capitalized on with the introduction of its Maple Waffle Breakfast Sandwich, aggressive international expansion, and improved relations with its franchisees.
  • Pizza Hut takes the #3 spot on the 2011 AllBusiness AllStar list, moving up from last year's #24 ranking. The brand's performance took off in 2010, growing 8 percent year over year in Q3 (Q4 earnings have not yet been released). Strong drivers for this growth included promotional price cuts (the $10 pizza deal) and new marketing campaigns (incorporating social media and mobile channels) designed to emphasize value and build consumer loyalty. Pizza Hut also grew its international presence in India and China.

The AllBusiness AllStar Franchise List remains the only franchise ranking that lets visitors interactively sort companies by the features that matter most to them. Unlike some other franchise rankings, The AllBusiness AllStar list critically and explicitly justifies all 300 selections. The AllBusiness AllStar Franchise List is the only one that highlights whether the franchise's Franchise Disclosure Document (FDD) reveals financial performance representations -- valuable information still not required by law. And only the AllBusiness AllStars incorporates financial strength criteria using credit and financial stress information from parent company Dun & Bradstreet, the world's leading source of commercial information and insight on businesses.

Visit AllBusiness.com for the complete 2011 AllBusiness AllStar Franchise List, further analysis of the state of the franchise industry, and more details on the AllBusiness AllStar Franchise assessment criteria.

© 2011 AllBusiness, Inc. All Rights Reserved. The AllBusiness product and service names mentioned herein are registered trademarks or trademarks of AllBusiness, Inc., or its affiliated entities. All other trademarks are the property of their respective owners.

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