Monday, June 23, 2014

How Do You Rank More Than 3,000 Franchise Brands?

From FORBES:

A best and worst of franchising list is tricky to put together. The methodology is just as important as the objective of the ranking. For the FORBES “best” and “worst” in franchising, FRANdata considered demand for the franchise brand, success of existing franchisees and franchisor support from the perspective of “lender friendliness”. This brings up another factor we reviewed, transparency and the average investment.

As important as these criteria are, they can also appear nebulous, and indeed some are difficult to measure. In fact, we used proxies. Starting with demand, FRANdata examined a brand’s growth rate over the 2008 to 2012 period. High growth rates may be impressive but they can be misleading. Fast growth can become unsustainable and mask underlying issues. Therefore, as a proxy for sustainable growth and existing franchisee success, we calculated the franchised unit continuity rate between 2008 and 2012

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