The Franchise Times recently released its “Top 400” list for 2025. As the publication explains, the list reflects “the biggest franchise brands by global systemwide sales.” But the list provides some other notable insights into the current state of the franchise industry as well. National franchise lawyer Jeffrey M. Goldstein shares his thoughts:
Improving Economic Conditions Lead to Stronger Sales for Many (But Not All) Large Franchisors
In an article accompanying the release of the 2025 “Top 400” list, the Franchise Times notes that two factors contributed to “stronger sales across hundreds of franchise systems” in 2024 (the 2025 list is based on last year’s data). Specifically, it notes the drop in inflation over the year (from 3.1 percent to 2.9 percent) and the Federal Reserve’s decision to cut interest rates to 4.48 percent at the close of the year (down from 5.4 percent in January).
However, while these factors (among others) led to increased profitability for many of the world’s largest franchisors, large franchisors did not see increased profitability across the board. Among the 10 largest franchise systems, the Franchise Times reports that two experienced net sales declines over the course of last year.
Restaurant Concepts Continue to Dominate the Franchise Market
As has been the case for years, restaurant concepts continue to dominate the franchise market. Among the 10 largest franchise systems, seven are quick-service restaurant and pizza delivery brands. Going slightly further down the list, 15 of the 20 largest franchise systems are in the restaurant industry.
One particularly fast-growing restaurant chain took the title for the largest percentage increase in franchised outlets (76.5 percent) while also coming in fourth in terms of percentage increase in sales (40.1 percent). Even though data suggest that people are eating out less (as inflation and interest rates still remain high from a historical perspective), it is clear that many food franchisors are still finding ways to succeed in today’s market.
Health and Personal Care Franchises See Significant Gains
While food concepts have long been at the top of franchising, the Franchise Times reports that many other sectors are seeing significant growth as well. For example, according to the publication, health and personal care franchises collectively saw the largest percentage increase in sales in 2024—increasing 12.7 percent from $11.2 billion to $12.7 billion.
This includes senior care franchises, with several brands reportedly “tapping into a growing demand for the elderly to age in their own homes as opposed to being moved into 24-hour senior care centers.” According to the “Top 400” list, 11 senior care brands experienced revenue growth of 10 percent or more in 2024.
Likewise, the Franchise Times reports:
“Personal care and services, which includes franchises ranging from hair care to youth activities, continued a hot streak from 2023. In 2024, the category’s overall sales rose 8.8 percent, to $31.3 billion. Fitness brands alone accounted for a third of the sales, with $11.7 billion.”
The “Top 400” list indicates that several fitness brands reported multi-billion-dollar system-wide sales last year, with the largest brand reporting total sales of $4.8 billion.
Home Services Franchises Grow While Home Sales Stagnate
The Franchise Times’ “Top 400” list highlights a notable dichotomy in the world of home-related franchising. While “[t]otal sales in the home services category rose 2.6 percent in 2024 . . . . [as h]ome improvement concepts led the subcategories in the sector,” real estate brokerage franchises saw average sales growth of just 0.1 percent along with a four percent decrease in franchised outlets. This average sales growth figure reflects a mix of positive and negative growth among the industry’s most well-known brands.
There Are Major Disparities in the World of Franchising
Perhaps the most notable takeaway from the Franchise Times’ most recent “Top 400” list is the disparity in size among even the world’s largest franchised systems. For example:
- While the world’s largest franchise system by sales earned more than $130 billion in 2024, the 25th largest system had $4.5 billion in sales, and the 400th largest system reported $59.1 million in sales last year.
- Among the world’s largest franchise systems by sales, the total number of franchised outlets ranged from 22 to 85,816 in 2024.
Then, there are the thousands of franchisors that didn’t make the “Top 400” list. For prospective franchisees, there are lots of options available, and making an informed buying decision requires a critical assessment of a variety of financial, legal and practical considerations.
Are You Considering a “Top 400” Franchise?
With all of this in mind, what do you need to know if you are considering a “Top 400” franchise in 2025?
As with all franchise opportunities, when considering a franchise on the Franchise Times’ “Top 400” list, thorough due diligence is essential. Size does not guarantee success; and, while many franchisees at the world’s largest brands find success, many franchisees struggle—and ultimately fail—as well. Among other things, conducting thorough due diligence involves:
- Evaluating several competing franchise opportunities;
- Carefully reviewing each franchisor’s Franchise Disclosure Document (FDD) and franchise agreement;
- Attending one or more discovery days;
- Talking to current and former franchisees, and,
- Hiring a franchise attorney to conduct a legal analysis of the FDD and franchise agreement for your chosen franchise opportunity.
At Goldstein Law Firm, we offer several fixed-fee franchise business review programs for prospective franchisees. National franchise attorney Jeffrey M. Goldstein has well over 30 years of relevant experience, and, unlike many other franchise attorneys, he has devoted his career to exclusively representing franchisees.
Schedule a Free Initial Consultation with National Franchise Attorney Jeffrey M. Goldstein
If you are considering a franchise opportunity and are interested in learning more about our fixed-fee franchise business review programs for prospective franchisees, we invite you to get in touch. National franchise attorney Jeffrey M. Goldstein will be more than happy to discuss your options and help you make an informed decision based on your specific needs. To schedule a free initial consultation, please call 202-293-3947 or tell us how we can reach you online today.
