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10 Most Profitable Franchises In The World

Neha Gupta

Have you ever wondered which the most profitable’ franchises in the world are? Well, you need not worry as we have compiled a list of some of the biggest and most successful franchises worth investing in as an investor or entrepreneur. Investing in a successful and renowned franchise is a relatively sure way of running a successful business.

Our list of the most profitable franchises in the world is diverse, focusing on various industries. The size of the franchise is a significant consideration focusing on the number of locations opened under the parent company brand name. We also took into account the annual revenues generated by each franchise, as it is a true reflection of how big and successful the franchise is.

Insider Monkey follows corporate insiders and hedge funds to identify profitable investment ideas in advance. In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market.

We also compile lists like 30 most popular stocks among hedge funds and 5 Public Companies That Don’t Do Drug Tests in 2019 to broaden our horizon and identify emerging trends in advance. Here is our list of the 10 most profitable franchises in the world.

 #10 Subway

Subway ranks 10th in our list of the ten most profitable franchises in the world, a list widely dominated by fast-food companies. The fast-food joint is best known as the world’s largest sandwich chain. As of the start of 2019, it was ranked as one of the fastest-growing franchise with a retail network of over 41,500 locations.

Subway has operations in over 100 countries, even though half of all its locations are in the U.S. It is ranked as the world’s largest single-brand restaurant chain. On average, a single Subway restaurant generates over $400,000 in revenues annually.

Subway

 #9 Taco Bell

The fact that it takes close to $2 million as the initial investment fee to open a Taco Bell outlet underscores why it is one of the most cherished franchises in the fast-food space. The restaurant chain is best known for the wide variety of Mexican inspired foods it serves. Its famous brands include tacos, burritos, and nachos.

Taco Bells generates over $900 million in annual revenues, affirming its credentials as one of the highest-grossing fast-food franchise in the world. The chain has over 6000 franchises.

Taco Bell is owned by Yum Brands (NYSE:YUM) which also owns KFC and Pizza Hut. Yum Brands' stock was in 36 hedge funds' portfolios at the end of September 2019.

Taco Bell

#8 Dairy Queen

Dairy Queen has made a name for itself on operating a network of ice cream joints as well as fast-food restaurants. The company operates 5,000 franchises in the United States, backed by another few thousand on the international scene. With annual revenues of more than $2 billion, it has grown to become one of the most profitable franchises in the world.

Dairy Queen

#7 Dunkin Donuts

Dubbed as an American premium donut store, Dunkin Brands Group Inc. (NASDAQ:DNKN) has grown since inception to become one of the most profitable franchises in the world. Backed by 12,000 locations in 36 countries, the chain is best known as the largest coffee and baked goods chain.

The company’s chain of products includes donuts, bagels among other baked goods, as well as iced beverages. The premium donut generates over $1 billion in annual sales.

Most Profitable Franchises to Buy in 2015

 #6 Ace Hardware

Billed as the world's largest hardware retail cooperative underscores Ace Hardware as one of the most successful franchises in the world. Founded in 1924, the company has expanded robustly, consequently setting base in China, Panama, and the United Arab Emirates, in addition to operating 17 distribution centers in the U.S.

With over 5,200 locations, the company generates over $4 billion in revenues annually, affirming its position as the world’s largest home improvement franchise.

shutterstock_309245615_GRINNELL, IA/USA - AUGUST 8, 2015: Ace hardware store exterior and sign. he Ace Hardware Corporation is a retailers' cooperative in the United States. hardware, ace, store, front, shop, exterior, paint, business, carpenter, commercial, cooperative, franchise, home, industrial, repair, small, supplies, tool, warehouse, workshop, yard

#5 Hertz

Operating in over 150 countries worldwide, Hertz Global Holdings Inc.(NYSE:HTZ) is one of the world’s largest car rental company. With operations in almost every continent, the company has established itself as one of the most profitable franchises in the world.

The company employs over 30,000 employees worldwide, managing an asset portfolio valued at over $20 billion. Its annual sales tops highs of over $8 billion on handling over 40 million calls and 30 million reservations annually.

Hertz

 #4 KFC

Backed by a footprint of over 15000 outlets, KFC has evolved over the years to become one of the most profitable franchises in the world. The chain is best known for fried chicken, a product line from which it generates a good chunk of its revenues.

The franchise has grown and currently serves over 12 million customers a day in more than 100 countries. With revenues, topping over 6 billion annually explains why it is one of the most successful franchises in the world. It is also estimated that over 100 million people see a KFC commercial at least once a week. Yum Brands also owns KFC.

Kentucky Fried Chicken Box with chicken pieces in the foreground, KFC, fast food, Yum! Brands, Inc.(NYSE:YUM) shutterstock_310315346

#3 The UPS Store

Ranked as the world’s largest retail shipping and postal service operator, The UPS Store is arguably one of the most profitable franchises in the world. The wholly-owned subsidiary of United Parcel Service, Inc. (NYSE:UPS) has over 5,000 independently owned locations within Canada and the U.S

The franchise locations offer business services to small offices as well as corporate offices and consumers. Also, they maintain shipping and postal services targeting shopping centers and commercial complexes

The UPS Store

#2 7-Eleven

7 Eleven runs the world’s largest convenience store in the world that affirms its position as one of the most profitable franchises in the world. A network of over 50,000 retail stores spanning over 16 countries explains the company's massive empire in the franchise space.

In the U.S alone, the company has over 8,000 retail stores, a market from which it generates a good chunk of its total revenues. It is one of the most profitable franchises in the world in part because of an elite franchise model that has continued to meet customer satisfaction over the years with satisfaction-inspired innovations.

shutterstock_406791976_NEW YORK - CIRCA MARCH 2016: exterior of 7-Eleven shop. 7-Eleven (7-11) is an international chain of convenience stores, headquartered in the American city of Dallas, Texas. eleven, logo, nyc, store, 7-11, 7-eleven, american, commerce, consumption, food, goods, market, modern, ny, product, shop, supermarket, trade, urban, us, united, states, wall, window, york

 #1 McDonalds

McDonald’s Corp (NYSE: MCD) is arguably the biggest and most successful franchise in the world. The fast forward chain tops the list in part because of the more than $80 billion in sales it generates annually. The company has continued to post revenue growth year over year, even on coming under immense pressure from new franchises in the fast-food space.

Backed by a network of over 30,000 outlets worldwide explains why the McDonalds has generated more than $20 billion in revenues a year since 2005. It is the most profitable franchise in the world, given its sheer size that is larger than KFC and Burger King combined.

MCD was in 48 hedge funds' portfolio at the end of September. It isn't the most popular hedge fund restaurant stock, but it is among the top 5. In terms of investments hedge funds prefer these 5 stocks over any of the restaurant stocks.

McDonalds

Disclosure: None. This article is originally published at Insider Monkey.