Investigate before investing. It’s simple enough advice, but prospective franchisees are often unsure where to start. Should passion or practicality be the deciding factor? Is an emerging or mature system the way to go? Sifting through thousands of brands in a multitude of industry segments can prove daunting, even for seasoned business professionals—and more so for first-time franchisees. That’s where the Franchise Times Zor Awards project comes in.
Designed to cut through the sales jargon and marketing speak, the Zor Awards, now in its sixth year, provides a top pick and two runners-up in each of 10 categories. We focus on return on investment in this project, which means profitability for the operator rather than top-line sales. (See below for details on our methodology.)
Top-performing franchisees offer their honest insight and advice through interviews with the editorial team, and prospective owners can learn what it takes to drive sales and ultimately achieve success in each system. We also pull back the curtain on the franchisor-franchisee relationship as operators share what works and where they’d like to see improvement.
Do the research before you buy in and take advantage of the Zor Awards for some additional detective work.
—Laura Michaels
Franchise Times | Full Speed Ahead Big Haul Affordable Entry On the Move | Early Risers Fixer Upper Upstart Adventure |
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How we chose the Zor Awards
STEP 1: We started by selecting 10 new industry categories, which were chosen to be popular and attractive to different types of franchisees (for example, those who have a passion for fitness or want to run a restaurant). We change these categories each year.
STEP 2: We identified initial contenders for each category, drawn from the Franchise Times Top 400 database, which is a 20-year-old research tool covering more than 650 U.S.-based franchise systems. We further narrowed the list by analyzing the quality of information in each brand’s Item 19 (which contains information about profitability for franchisees) or other key financial data, and also focusing on brands that are currently expanding inside the United States.
STEP 3: Our research team examined six financial metrics in each brand’s franchise disclosure document, with a focus on profitability for the franchisee. Narrowing the categories to the three finalists was a matter of the quality of that financial information disclosed, an exclusive calculation of return on investment, as well as editorial research including knowledge of management teams, product or service offerings, unit openings and closings, financial backing of the brand, litigation, etc.
STEP 4: To come up with the winners, we then did a deeper dive into the finalist FDDs and publicly available financial metrics, forming one strongly weighted pillar of our three-part scoring process. Next, our editorial team talked to experts in franchising, reviewed our own coverage of these brands, and looked at analyst reports, recent financial performance and outside press articles to form the second heavily weighted component of the ranking.
STEP 5: Lastly, we compiled the results of the online voting conducted in December to reflect industry enthusiasm.
STEP 6: We then declared a winner in each category and conducted interviews with a few top-performing franchisees in each brand to share best advice and lessons learned.