Franchise capitalization

Vasil Gazizulin

| 13.05.2024

If you're a franchisor, you know that chasing profit is only half the battle. Capitalization is the other crucial prey that must be caught. Fortunately our team Topfranchise, is here to help. With over 20 years of experience as a franchisors and experts, we'll be analyzing capitalization in a series of articles. Stay tuned to learn from the best!

Examples of franchise brands where an increase in the number of outlets affects the growth of brand capitalization

Certainly! The growth of brand capitalization can be influenced by various factors, including the expansion of franchise outlets. Here are a few examples of franchise brands where an increase in the number of outlets positively affects brand capitalization:

1.   McDonald's: McDonald's is a prime example of a franchise brand where the expansion of outlets significantly impacts brand capitalization. As McDonald's opens more franchise locations worldwide, its brand presence grows, leading to increased revenue streams and enhanced market value.
UNITS: 40 275 + *
CAPITALIZATION: $198,28 Billion **

2.   Starbucks: Starbucks' strategy of opening new franchise outlets in both domestic and international markets has contributed to its brand capitalization growth. The expansion allows Starbucks to reach new customers, drive sales, and strengthen its position as a leading coffeehouse chain.
UNITS: 36 000 +
CAPITALIZATION: $86,21 Billion

3.   Subway: Subway's franchise model heavily relies on increasing the number of outlets to drive brand capitalization. With a focus on global expansion and franchising, Subway continuously opens new locations, which positively impacts its market value and brand recognition.
UNITS: 37,000 +
CAPITALIZATION: $9,6 Billion

4.   Domino's Pizza: Domino's Pizza has experienced significant growth in brand capitalization due to its aggressive expansion of franchise outlets. By opening new stores in various markets and investing in technology and delivery infrastructure, Domino's has strengthened its brand and market position.
UNITS: 18,848 +
CAPITALIZATION: $17,91 Billion

5.   7-Eleven: 7-Eleven's convenience store franchise model relies on expanding its network of outlets to drive brand capitalization. With thousands of franchise locations worldwide, 7-Eleven continuously adds new stores, which contributes to its market value and brand recognition.
UNITS: 83,779 +
CAPITALIZATION: $34.67 Billion

In these examples, the increase in the number of franchise outlets not only expands the brand's reach but also generates additional revenue and strengthens the brand's market position, leading to growth in brand capitalization over time.

Subtotal

As we see in the global financial market, a franchise outlet is valued from $500,000 to almost $5 million.

It's no secret that the number of franchise points can have a significant impact on a brand's capitalization in today's world. For franchise brands looking to expand, it's crucial to act fast and seize every opportunity for growth. The Motto for growing companies should be - To expand to as many continents and countries as possible. If you're looking to expand your brand, consider targeting growth points in Southeast Asia, Africa, GCC, LATAM, India, and China. These regions offer vast potential for companies looking to expand their reach and capitalize on emerging markets. Don't wait, take action now and make your mark on the global stage!

*, ** - The figures given are taken from the Internet and are approximate. This article is not a recommendation for investment.

How to enter global franchising markets, get a free consultation from our colleagues from Topfranchise today! https://topfranchise.com/how-to-add-your-franchise/

Vasil Mansur-Ulla Founder of Topfranchise.com
vasil@topfranchise.com