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World's Top Ten Franchises
Ever wondered how they got to be the best?

Author:
Franchise Finder

In a recent article, we talked about what makes a good franchise. The world's top franchises have, amongst other things, a strong brand, a great concept, a solid marketing strategy and a strong franchisor at the helm. Even though these qualities don't always guarantee a global franchise success in the South African market, they have nevertheless made the following the world's top ten franchises.

Subway

Country of Origin: United States
What year was Subway started? 1965
How many Subway franchises are there worldwide? 35 000
Subway Franchises in South Africa: 15
Seventeen-year old Fred Deluca opened his first submarine sandwich store in Bridgeport, Connecticut, with the help of a loan from a family friend. His original goal was to make enough money to fund his college degree, but business boomed and by 1974 he was running sixteen stores across Connecticut. Finally, he decided to franchise Subway and the brand rapidly became the leading choice for people looking for quick, healthy snacks. In 2011, Subway surpassed MacDonald's to become the world's largest restaurant chain. The first South African Subway franchise opened in 1997, but the brand's presence remains understated in this country

Macdonald's

Country of Origin: United States
What year was MacDonald's started? 1954
How many MacDonald's franchises are there worldwide? 33 000
MacDonald's Franchises in South Africa: 148 Now the world's biggest burger franchise chain, the first MacDonald's was a barbecue restaurant, opened in 1940 by the Macdonald brothers, Richard and Maurice. The MacDonald's franchise was born when salesman Ray Crock pitched an idea to replicate the restaurant across America. Later, Crock bought out the MacDonald brothers' stake in the company, and spearheaded the expansion of the MacDonald's empire into one of the world's top franchises. In 1995, MacDonald's opened its first South African outlet - pitched against local fast food rivals Steers and Wimpy, growth has been slow but steady.

7-Eleven

Country of Origin: United States
What year was 7-Eleven started? 1927, as Tote'm Stores
How many 7-Eleven franchises are there worldwide? 27 900
7-Eleven franchises in South Africa: 8
Founder Joe C. Thompson opened the first 7-Eleven convenience store in Dallas, Texas. Selling only convenience items - bread, milk and eggs - during extended store hours of 7am to 11pm, the store was a hit and in 1952, Thompson opened his 100th 7-Eleven. In 1963, the 7-Eleven franchise adopted an 'open 24 hours a day' policy, which increased the chain's popularity amongst patrons and turned it into one of the world's top franchises. The chain was acquired by Japan's Ito Yokado, a Japanese general merchandise store, in the early 1990s. The franchise has had a small presence in South Africa since 2001, being rescued from disaster by Metcash (Metro Cash and Carry) in 2004.

Kumon

Country of Origin: Japan
What year was Kumon started? 1954
How many Kumon franchises are there worldwide? 26 138
Kumon franchises in South Africa: over 100
In 1954, Japanese Mathematics teacher Toru Kumon devised a learning programme to help his son achieve better Maths grades at school. In 1955, he opened the first Kumon Centre in Moriguchi City. More soon followed and by 1969, there were 10 000 Kumon students across Japan. In 1974, the first Kumon franchise was established in America, followed by franchises in Brazil, Canada, Germany and France. Today, Kumon is one of the world's top franchises to own and boasts 4 million students on every continent. The franchise has operated successfully in South Africa since 1991.

KFC

Country of Origin: United States
What year was KFC started? 1952
How many KFC franchises are there worldwide? 15 000
KFC Franchises in South Africa: 500
Colonel Harland Sanders formed KFC out of an earlier company, Sanders Court and Café, established in 1930 at a gas station in Kentucky. When the interstate highway was built in 1955, it forced the closure of his café and - broke - the Colonel hit the road, selling his fried chicken franchise concept to restaurant owners. Hard work paid off and by 1960 there were 400 KFC franchises across North America. In 1964, after selling 600 franchises, Colonel Sanders sold his interest in KFC for $2 million, but remained a public spokesman for the company until his death in 1980. KFC came to South Africa in 1968 and is now considered the most popular franchise in South Africa.

Burger King

Country of Origin: United States
What year was Burger King started? 1953, as Insta-Burger King
How many Burger King franchises are there worldwide? 12 300
Burger King franchises in South Africa: Not yet
The first Insta-Burger King restaurants in Jacksonville, Florida - although inspired by the original hamburger joint, MacDonald's - didn't experience quite the same levels of success. In 1959, the faltering restaurant chain was bought from its original owners by Miami franchisees James McLamore and David R. Edgerton. They renamed the fast food chain Burger King and expanded it to include 250 stores across the United States. Currently, Burger King is owned and managed by a private equity group, 3G Capital, and is rated the world's second biggest burger chain franchise. The Burger King franchise is focusing on expansion into international markets, and is rumoured to be 'mulling over' opportunities presented by the South African market.

SPAR

Country of Origin: Netherlands
What year was SPAR started? 1932
How many SPAR franchises are there worldwide? 12 136
SPAR Franchises in South Africa: 800
As the Dutch name suggests, SPAR is a supermarket brand focused on providing its customers with value for money. After establishing a number of SPAR franchises in the Netherlands, founder Adriaan Van Well took his supermarket concept to neighbouring Belgium, before launching SPAR International in 1953. SPAR's strength is its ability to adapt business models to a particular region's culture and needs, and it's an approach which has made them one of the world's top franchises. SPAR has a 'voluntary trading policy', which means that, although store owners are encouraged to take advantage of SPAR's trading power, they can also source goods from local traders, at their discretion. This gives each SPAR franchise its own local flavour and feel. With a strong brand presence in South Africa since 1963, SPAR is now focusing on expanding into other BRIC countries, namely China, India and Russia. South Africa is the second largest profit centre for SPAR International (by retail sales in Euros).

Pizza Hut

Country of Origin: United States
What year was Pizza Hut started? 1958
How many Pizza Hut franchises are there worldwide? 11 500
Pizza Hut franchises in South Africa: Coming (again) soon?
Brothers Dan and Frank Carney opened the first Pizza Hut in Wichita, Kansas with a $600 loan from their mother. In 1959, they opened their first franchised unit and in 1972, with 314 franchises under their belt, they listed their company on the New York Stock Exchange. In 1978, Pizza Hut was acquired by Pepsi-Co, which later sold it to Yum! Brands (which also owns KFC). In 1999, after only a few short years, Pizza Hut withdrew from South Africa, after a failed attempt to establish a market presence here - generally accredited to strong brand loyalty to South African pizza franchises Debonairs and Scooters Pizza - but recently announced comeback plans.

Domino's Pizza

Country of Origin: United States
What year was Domino's Pizza started? 1960, as DomiNick's
How many Domino's Pizza franchises are there worldwide? 9000
Domino's Pizza franchises in South Africa: No
Brothers Tom and James Monaghan purchased a pizza parlour situated in a prime spot near Michigan State University. The restaurant did well, given the student population, and five years later Tom renamed the business Domino's Pizza and started franchising. Some years earlier, his brother James had traded his shares in the company for a Volkswagen Beetle. We bet he wish he had never done that - by 1990, Tom had established 1000 franchises, and eventually sold Domino's Pizza to Bain Capital for $1 billion. Domino's Pizza is the world's second largest pizza franchise and continues to expand, recently celebrating the opening of its 9000th franchise.

Intercontinental Hotels

Country of Origin: United Kingdom; United States
When was Intercontinental Hotels started? 1997
How many Intercontinental Hotels franchises are there worldwide? 3 831
Intercontinental Hotels franchises in South Africa: 9
The world's largest hotel franchise has a peculiar history full of mergers and acquisitions. Its origins can be traced back to a brewery in Burton-on-Trent, in the United Kingdom, established in 1777. The brewery, founded by one William Bass, went on to become one of the largest brewers and pub owners in the UK, a company called Bass. In the late eighties/early nineties, Bass made two key hotel acquisitions - Holiday Inns International and North American Holiday Inns. Their next acquisition was the upmarket Intercontinental Hotel Company, founded by the now-defunct Pan Am Airways in 1946, and The Intercontinental Group was born. The Intercontinental Group houses several brands, including Intercontinental Hotels & Resorts, Holiday Inn, Holiday Inn Express and Crowne Plaza Hotels. In 1997, the group took the decision to sell off its hotel buildings, but to maintain control of hotel branding through franchise agreements, a strategy which has turned it into the hotel group with the most guest rooms in the world. In South Africa, the Intercontinental Hotels and Holiday Inn franchises are operated by Southern Sun.

*This list is based on the following franchise rankings:

Criteria for inclusion in the world's top ten franchise list include sales, brand value and number of franchises worldwide.

Author: Franchise Finder, Online Directory of Franchises and Business Opportunities in South Africa


 
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