As a lifelong Pittsburgh Steelers fan, I cringe when any beer infused football talk pivots to the discussion of which quarterback is the GOAT (Greatest Of All Time). I know that within the first 15 seconds of that conversation, the name of our arch-nemesis from New England is going to be uttered. Ugh. But, to me the more interesting part of this discussion is the criteria used for people to make the decision of what makes someone or something the GOAT.
Every 2 years, Forbes magazine delves into a similar debate. Forbes publishes the results of its study of franchising by ranking what it believes to be the best and worst franchise brands in the US. For its 2018 survey, it partnered with the team from FranData to score and rank the more than 3,300 active franchise brands in the country.
To me, it is very insightful to understand the criteria that lead to the rankings. In this instance, Forbes and FranData relied upon 5 central criteria in their rankings:
System Sustainability – how long-term viable and strong is the franchise system
System Demand – is there significant demand resulting in a growing number of locations
Value for Investment – does the investment make financial sense
Franchisor Support – how effective is the franchise team in supporting the franchisees
Franchisor Stability – does the franchise company have the financial strength to grow and re-invest
In general terms, I agree with the Forbes/FranData criteria list as being relevant and important with one big exception. These criteria will filter out a number of emerging franchise brands because they have not yet proven their sustainability or stability. From my experience, some of the best opportunities in franchising are to be found within this group!
So, as with all GOAT lists, make sure that you understand the criteria being used to determine the best and the worst.