The 5 Leading Franchises of 2010

From tutoring centers to fast food outlets, the types of available franchises can be dizzying. There are hundreds, even thousands, of potential franchise opportunities, each with their own strengths and weaknesses.

Which are the franchises that continue to lead the pack? According to Entrepreneur Magazine, who has just completed their annual ranking of the top 500 franchises, here is a look at the top five franchises that you might see in 2010.

Subway

Subway has been in existence since 1965, and it has offered franchise opportunities since 1974. There are currently 22,525 franchise locations in America and almost 9,000 in foreign markets worldwide. Costs for starting a Subway franchise can be anywhere between $85,000 and $260,000, and the franchising fee can be financed. Subway has been the top-ranked franchise for the last five years.

McDonald’s

Since 1955, McDonald’s has offered successful franchise opportunities with a streamlined business model and process, as well as obvious worldwide branding. In 2009, there were over 12,000 American franchises and over 13,000 franchises around the world.

While McDonald’s is still seeking additional franchises, expect to have plenty of capital available if you wish to start one. Typical startup costs are about $1 to $2 million for a single store with no in-house financing available.

7-Eleven

7-Eleven Inc was founded in 1927 in Dallas, Texas and began franchising in 1964. Today 7-Eleven has over 30,000 stores worldwide, with 6,378 in the U.S in 2009. Franchisers must have a net worth of at least $127,000, and depending on whether the store is rented or newly constructed, startup costs can range from about $40,000 to $775,000.

Hampton Inn & Suites

Hampton Inns started in Tennessee in 1984 and found a niche with their affordable 2-room suites. Franchises in the U.S. total 1,595 in 2009. Although there are no net-worth qualifications, an entrepreneur must still have industry or general business experience, as well as $3.7 to $13 million for startup costs.

Supercuts

Supercuts have offered quality, streamlined hair salon services since 1975 and franchise opportunities since 1979. Its popularity continues to grow with over 1,000 units in the U.S. in 2009. Although this appears to be a seemingly simply retail franchise, expect to have $300,000 in net worth with high liquidity, as well as an ability to invest in startup costs of $111,000 to $240,000.

The one common trait of the top five franchises ranked by Entrepreneur is that they have all stood the test of time, generating revenues for decades. While their proven track record may translate into higher franchise fees, these top five franchises are also more likely to prove profitable for you in the long-term.

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