Investment Themes

Franchises: A model that generates recurring income

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Investment Themes

The franchise model is based on collaboration between a brand and independent entrepreneurs. One company (the franchisor) grants another party (the franchisee) the right to use its brand, products and services. This system enables rapid expansion, with little initial investment on the part of the franchisor. Companies such as McDonald's, Starbucks, Marriott International and Planet Fitness have built their success on this model.

The franchisor helps the franchisee start up the business to ensure it runs smoothly. He contributes his reputation, experience, marketing strategy, national or international communications and know-how. This pooling of resources enables franchisees to get up and running quickly, and to benefit from a proven business model that is often profitable from the outset, thanks to the experience of other franchises.

In return, the franchisee must bring the brand's concept to life locally, in line with the franchisor's business model. To use the brand, the franchisee pays part of his income in the form of royalties, which can represent several tens of percent of sales, and rent if he does not own the land. They must also pay an entry fee to become a franchisee, and make a personal contribution that is not financed by a bank. In addition to these costs, the franchisee must respect the franchisor's guidelines, which can limit his or her flexibility.

Despite the high initial costs for the franchisee, this model is advantageous for both parties. It ensures recurring revenues and requires little initial capital for the franchisor, while offering the franchisee a guarantee of success without the need for extensive prior knowledge. This model has proven its effectiveness, enabling businesses to grow rapidly while maintaining uniformity of quality and service.

For potential franchisor shareholders, it's important to know that you're investing as much in a property portfolio, brand and logistics network as in a chain of restaurants, car dealerships or hotels. You also benefit from recurring revenues, greater visibility and a business model that's light on assets and capital expenditure.

Here's a list of the main franchisors listed on the stock exchange.

Our selection

Real Estate
Residential Real Estate Development
381M -13.04%
Consumer Non-Cyclical
Carbonated Soft Drinks
23.08B +16.40%
Consumer Cyclical
Other Toys & Juvenile Products
8.48B +1.00%
Energy
Gasoline Stations
60.91B +23.23%
Consumer Cyclical
Quick Service Restaurants
41.03B +1.06%
Financials
Insurance Brokers
1.56B -8.05%
Industrials
Other Industrial Machinery & Equipment
21.13B +17.53%
Consumer Non-Cyclical
Supermarkets & Convenience Stores
29.91B -8.98%
Consumer Cyclical
Quick Service Restaurants
41.3B -9.99%
Consumer Cyclical
Optical Goods Stores
800M -18.52%
Real Estate
Other Real Estate Services
6.25B -8.03%
Consumer Non-Cyclical
Supermarkets & Convenience Stores
12.87B +11.10%
Consumer Cyclical
Quick Service Restaurants
3.05B -51.94%
Industrials
Pest Control Services
17.57B -38.92%
Consumer Non-Cyclical
Consumer Repair Services
4.25B +15.30%
Consumer Cyclical
Gyms, Fitness and Spa Centers
3.63B -55.07%
Consumer Cyclical
Quick Service Restaurants
2.94B -9.78%
Consumer Cyclical
Sporting & Outdoor Goods
921M +16.38%
Consumer Cyclical
New Car Dealers
8.32B +14.04%
Consumer Cyclical
Gyms, Fitness and Spa Centers
2.48B +15.36%
Consumer Cyclical
Other Computer & Electronics Retailers
1.17B +19.34%
Consumer Cyclical
Quick Service Restaurants
26.12B +12.71%
Consumer Cyclical
Other Hotels, Motels & Cruise Lines
92.46B +14.44%
Consumer Cyclical
Quick Service Restaurants
11.7B -15.15%
Consumer Cyclical
Other Hotels, Motels & Cruise Lines
23.6B +13.26%
Consumer Cyclical
Quick Service Restaurants
195B -9.46%
Consumer Cyclical
Other Hotels, Motels & Cruise Lines
72.59B +12.54%
Consumer Cyclical
Copyright Management
394M +9.32%
Consumer Cyclical
Sports & Outdoors Retailers
5.95B +9.78%
Consumer Cyclical
Hotels & Motels
5.49B -1.60%
Consumer Cyclical
Quick Service Restaurants
345M +12.56%
Consumer Cyclical
Jewelry
8.4B +16.79%
Consumer Cyclical
Other Restaurants & Bars
124B +30.34%
Real Estate
Other Real Estate Services
263M +63.50%
Consumer Cyclical
Automotive Parts & Accessories Retailers
430M +2.54%
Consumer Non-Cyclical
Consumer Repair Services
2.05B -13.83%
Consumer Cyclical
Other Miscellaneous Specialty Retailers
1.24B -14.59%
Consumer Cyclical
Other Restaurants & Bars
793M -35.96%
Industrials
Passenger Car Rental
4.93B +8.36%
Healthcare
Other Healthcare Facilities & Services
118M +2.18%
Consumer Cyclical
Quick Service Restaurants
1.65B +2.46%
Consumer Cyclical
Quick Service Restaurants
576M -6.81%
Consumer Cyclical
Quick Service Restaurants
358M +9.08%
Industrials
Other Employment Services
231M +74.50%
Consumer Cyclical
Quick Service Restaurants
148M +158.02%
Industrials
Passenger Car Rental
998M -45.23%
Consumer Cyclical
Gyms, Fitness and Spa Centers
208M -38.29%
Consumer Cyclical
Other Restaurants & Bars
1.25B +13.90%
Consumer Non-Cyclical
Personal Care Services
256M +61.67%

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  2. Investment Themes
  3. Franchises: A model that generates recurring income