For the franchise candidate, franchise rankings can be a useful tool when comparing business offerings. One of the most trusted names in investing, Forbes, has released their annual “Best and Worst Franchises to Buy” list, using objective criteria to inform their methodology. This highly credible list has a strong ranking algorithm resulting from their partnership with industry research firm FRANdata.
For the second year in a row, Sport Clips Haircuts has claimed one of the top spots in the medium investment category, which ranges from $150,000 to $500,000. The nation’s leading men’s and boys’ hair care provider came in ranked second, and was strong in all five criteria, especially in the areas of system sustainability and franchisor support. Sustained growth, introduction of new apps to speed check in thereby improving client experience and initiatives to recruit top talent all contributed to the brand’s strong ranking.
Looking at research and analytics of more than 3,300 active brands, the annual list ranks the health and appeal of the brands from the perspective of potential franchisees. Forbes set five main criteria as being important to a brand’s health and appeal.
- System sustainability
- System demand
- Value for investment
- Franchisor support
- Franchisor stability
Various components were examined and given weight within the criteria. When it came to unit patterns, both growth and continuity rate were considered. Validated franchisor support, initial and ongoing, was also weighted. The level of transparency into franchises’ operating expenses and potential profitability were important factors into the value for investing score as well. Franchisor’s financials were evaluated to determine its ability to reinvest in support as well as overall financial health and ability to stay around for the long term.