Are franchise stocks a good investment?

Whether a franchise is a good investment has more to do with industry-level dynamics than the franchise business model, but franchise stocks in industries like restaurants, gyms, and hotels have all been successful.

What is the most profitable franchise to own?

Based on total profit, the most profitable franchise business is probably McDonald's, which generated $8.6 billion in net income in 2025. On an individual level, there are a lot of franchises that have wide profit margins.

Do franchise stocks pay dividends?

Yes, franchise stocks typically pay dividends. The franchise model helps ensure steady profits.

How do franchise companies make money?

Franchises make money by collecting a percentage of the franchisee's sales, known as royalties. They also collect other fees for initiation, rent, supply chain, and more.

Are franchise stocks more stable than other consumer stocks?

Franchise stocks can be more stable than other consumer stocks. The franchise model helps insulate franchise stocks from the economic cycle as they tend to be profitable regardless of the state of the economy.

Best Franchise Stocks to Buy in 2026

By Jeremy Bowman – Updated Jul 18, 2026 at 9:07 PM EST | Fact-checked by Frank Bass

Key Points

Franchise stocks offer investment in diverse sectors with high-margin returns and lower risks.
Top franchise stocks include leaders like Marriott in hotels and McDonald's in fast-food.
Investing in franchise stocks involves buying shares through a brokerage app and considering dividends.

Loading paragraph...

Top franchise stocks to consider

The top franchise stocks include a number of well-known brands that are leaders in their respective industries such as Planet Fitness in gyms, Marriott International in hotels, Snap-on for tools, RE/MAX in real estate, and McDonald's, Wingstop, and Domino's Pizza in restaurants.

Loading paragraph...

Ticker Information Table
Name and ticker	Market capMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.	Current price	Industry
Planet Fitness (NYSE:PLNT)	$4.0 billion	$48.75	Hotels, Restaurants and Leisure
Marriott International (NASDAQ:MAR)	$92.3 billion	$346.53	Hotels, Restaurants and Leisure
Snap-on (NYSE:SNA)	$21.5 billion	$410.73	Machinery
RE/MAX Holdings (NYSE:RMAX)	$242.4 million	$11.46	Real Estate Management and Development
McDonald's (NYSE:MCD)	$195.0 billion	$271.26	Hotels, Restaurants and Leisure
Wingstop (NASDAQ:WING)	$3.2 billion	$115.72	Hotels, Restaurants and Leisure
Domino's Pizza Group Plc (LSE:DOM)	$783.8 million	GBX 200.60	Hotels, Restaurants and Leisure

Data as of Aug 10, 2026. Showing 7 of 7 total entries.

Loading ticker_table...

1. Planet Fitness

Loading paragraph...

NYSE: PLNT

Planet Fitness

Today's Change

(-2.52%) $-1.26

Current Price

$48.75

Key Data Points

Market Cap

$4.0B

Day's Range

$48.46 - $49.90

52wk Range

$37.03 - $114.26

Volume

1.8M

Avg Vol

2.3M

Gross Margin

39.32%

Loading company_card...

Planet Fitness was a model of excellence before the COVID-19 pandemic, as the company steadily expanded across the country. Its low-cost model, with monthly membership prices starting at $15, helped to ensure consistent demand.

Since its 2015 initial public offering (IPO), the stock price had gained more than 500% before falling sharply in 2026. The stock steadily gained in its early years but has traded mostly sideways since the pandemic. It's tumbled in 2026 after cutting its guidance for the year on slower growth than expected. It also said it would price increases in its Black Card premium membership.

However, the core business model is still solid. The company now has about 2,900 locations, and it expects to expand to 5,000 gyms or more, giving Planet Fitness plenty of room to grow. With a high-margin business and a budget-priced product, the gym stock looks like a good long-term bet.

2. Marriott International

Loading paragraph...

NASDAQ: MAR

Marriott International

Today's Change

(-2.08%) $-7.38

Current Price

$346.53

Key Data Points

Market Cap

$92B

Day's Range

$344.70 - $353.36

52wk Range

$256.49 - $410.98

Volume

884.7K

Avg Vol

1.6M

Gross Margin

19.13%

Dividend Yield

0.77%

Loading company_card...

Marriott became the world's largest hotel chain in 2015 with its acquisition of Starwood Hotels & Resorts, also making it one of the biggest franchisors in the world.

Hotel chains were hit hard by the pandemic, but Marriott's stock has rebounded well, thanks to the post-pandemic travel boom. Additionally, one of the strengths of the franchise model is that it insulates the franchisor from economic downturns or black swan events like the pandemic by removing many of the fixed costs that operators are obliged to pay.

Marriott delivered solid results in 2025, with revenue up 4% to $26.2 billion and operating income up 10% to $4.14 billion, demonstrating the consistency that franchises can deliver.

If you're looking for stocks in the travel industry, hotel franchisors like Marriott can be a safer option than alternatives like airlines and cruise lines, which have higher fixed costs.

Loading paragraph...

3. Snap-on Tools

Loading paragraph...

NYSE: SNA

Snap-on

Today's Change

(-1.35%) $-5.62

Current Price

$410.73

Key Data Points

Market Cap

$22B

Day's Range

$409.94 - $418.25

52wk Range

$319.20 - $423.02

Volume

116.7K

Avg Vol

359.5K

Gross Margin

51.82%

Dividend Yield

2.27%

Loading company_card...

Snap-on Tools calls itself the world's No. 1 tool brand. Franchisees sell its products from mobile stores, which are essentially trucks branded as Snap-on Tools stores.

Snap-on has delivered steady growth over its history. The need for tools won't go away and is closely tied to economic growth. Its net sales rose 1% in 2025 to $4.74 billion, but the company still posted an operating profit margin of 22%, reflecting the strength of the franchise model, and does not include franchisee financing, a lucrative business for Snap-On. In November 2025, Snap-on raised its dividend 14% to $2.44 a share, showing confidence in the business despite the current macroeconomic uncertainty. That also marked its 16th annual dividend increase in a row. In 2026, it continued to return cash to shareholders, announcing a $500 million share repurchase program, and acquired Diesel Laptops, which provides heavy-duty truck diagnostics, for $100 million.

The company's brand and its wide range of tools and equipment have made the stock a historical outperformer. Its business model should continue to deliver solid results since there is always a market for its products, even in a weakening economy.

4. RE/MAX Holdings

Loading paragraph...

NYSE: RMAX

RE/MAX Holdings

Today's Change

(0.79%) $0.09

Current Price

$11.46

Key Data Points

Market Cap

$242M

Day's Range

$10.91 - $11.47

52wk Range

$5.46 - $11.80

Volume

409.1K

Avg Vol

386.1K

Gross Margin

66.89%

Loading company_card...

The housing market has struggled since the pandemic ended, which dragged down shares of RE/MAX and almost every other real estate stock.

RE/MAX is the world leader in residential real estate sales by transactions. Today, the brand has more than 147,000 agents in almost 9,000 offices across 110 countries and territories.

However, the company's recent struggles and the challenges in the housing market have led it to be acquired by The Real Brokerage for $880 million. RE/MAX stock soared on the news, and the deal is expected to close in the second half of the year.

The Real Brokerage is a digital-first real estate company, and it seems to think combining RE/MAX's size with its technology will create a winner for investors.

Loading paragraph...

5. McDonald's

Loading paragraph...

NYSE: MCD

McDonald's

Today's Change

(-1.18%) $-3.23

Current Price

$271.26

Key Data Points

Market Cap

$195B

Day's Range

$270.36 - $275.75

52wk Range

$260.96 - $341.75

Volume

3.3M

Avg Vol

4.6M

Gross Margin

57.31%

Dividend Yield

2.68%

Loading company_card...

The fast-food giant has more than 45,000 locations around the world, with the vast majority -- more than 90% -- owned by franchisees. A few years ago, McDonald's converted many of the company's restaurants in China and other international markets into franchises, giving it even more of an "asset-light" model, freeing it of the fixed costs of running those restaurants. McDonald's also owns much of the real estate on which its franchised restaurants are built, allowing the company to collect rent from franchisees.

The fast-food giant posted 3.1% comparable sales growth in 2025 and has continued to deliver solid results to start 2026, benefiting from its reputation for value. The stock has been a steady winner throughout its history, and that's unlikely to change given its name recognition, prime locations, and marketing muscle.

Loading paragraph...

6. Wingstop

Loading paragraph...

NASDAQ: WING

Wingstop

Today's Change

(-0.94%) $-1.10

Current Price

$115.72

Key Data Points

Market Cap

$3.2B

Day's Range

$115.49 - $119.05

52wk Range

$115.01 - $345.81

Volume

726.1K

Avg Vol

1.3M

Gross Margin

82.62%

Dividend Yield

1.03%

Loading company_card...

Wingstop is much smaller than McDonald's, but the chicken wing seller offers a low-cost initial franchise fee and a simple menu, making its franchises easy to operate. It's also been a big winner in recent years thanks to its small-footprint model, which lends itself well to takeout and delivery, and it's known for having inexpensive locations. Domestic same-store sales surged 19.9% in 2024, continuing a blistering run for the company, though same-store sales turned negative in 2025, finishing down 3.3%, due to weaknesses with low-income and Hispanic consumers, reflecting broader macroeconomic trends, weakness in the labor market, and an immigration crackdown. Over the long term, it should be able to bounce back from the current setback, and profits have continued to grow thanks to its franchise model.

Chicken at fast-food restaurants has also proven popular, as evidenced by the success of peers such as Chick-fil-A and Popeyes, the latter now owned by Restaurant Brands International (QSR -1.20%). Wingstop has more than 3,000 locations around the world, with 98% owned by franchisees. It's aiming for at least 10,000 locations, giving it plenty of room to grow.

7. Domino's

Loading paragraph...

NASDAQ: DPZ

Domino's Pizza

Today's Change

(-2.00%) $-7.01

Current Price

$343.95

Key Data Points

Market Cap

$12B

Day's Range

$341.02 - $352.25

52wk Range

$282.00 - $469.00

Volume

467.2K

Avg Vol

921.4K

Gross Margin

40.02%

Dividend Yield

2.13%

Loading company_card...

You might be surprised to learn that Domino's has been one of the best-performing stocks on the market since the 2008-09 financial crisis, with its share price up more than 10,000% from the bottom. A successful turnaround plan that included reformulating the company's pizza recipe helped to drive the company's growth during the decade, and its strength in delivery has made it popular during the pandemic.

Domino's also has an appealing concept for franchisees. It offers a low-cost initial investment and a simple menu that combines with the global popularity of pizza delivery to make Domino's appealing to many entrepreneurs.

While the stock has underperformed in recent years, U.S. comparable sales have increased in recent quarters, showing the underlying strength in the business.

Loading paragraph...

How to invest in franchise stocks

If you're looking to buy a franchise stock, the process is easy. Just follow the steps below.

1. Open your brokerage app: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
2. Search for the franchise stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Loading paragraph...

Benefits and risks of investing in franchise stocks

Like any other sector, there are both benefits and risks to investing in franchise stocks. Let's take a look at a few of them.

Benefits:

The franchise business model helps insulate stocks from the performance of frontline businesses. Franchises can grow profits even when franchisee sales are declining.
Franchise stocks are generally established businesses with proven business models, making them less risky.
Franchise stocks tend to be profitable and pay dividends.
Franchise stocks generally pay dividends.

Risks:

The franchise model sometimes sacrifices growth for stability, so franchise stocks aren't usually high-growth.
Although the business model offers some stability, franchise businesses are still subject to industry and macro-level headwinds. A well-run franchise won't overcome bad business dynamics.
A franchise can suffer reputational risk for something that happens at the franchisee level. A successful franchise stock must protect its reputation.

Loading paragraph...

Methodology: How these stocks were chosen

These stocks were chosen to show the range of options available to investors looking for franchise stocks. Some industries contain a large number of franchise stocks, like hotels and fast-food restaurants, while they are harder to find in other industries.

Stocks like Planet Fitness, Snap-on Tools, and RE/MAX offer investors unique opportunities to get exposure to franchise stocks in their respective industries.

Companies like Marriott, McDonald's, Wingstop, and Domino's Pizza illustrate the franchising model well in the hotel and fast food industries.

Loading paragraph...

Should you invest in franchise stocks?

Franchise stocks aren't easy to pigeonhole since they hail from a wide range of sectors, including restaurants, retail, and travel.

However, publicly traded franchise companies tend to have a few things in common. They are high-margin businesses since the franchise model shifts the risks and fixed costs to the franchise owner, and they tend to have well-known, valuable brands, which create competitive advantages.

Because the franchise model works best with well-known brands, these companies tend to be mature businesses, although there are some exceptions. Many franchise companies are also dividend-paying stocks, a sign of a business with reliable profits.

Overall, this business model offers a number of advantages, including high margins, the ability to rapidly expand, and low fixed costs. If you're looking for a combination of growth and reliable profits that are recession-resistant, then franchise stocks likely deserve a place in your portfolio.

Loading paragraph...

FAQ: Franchise stocks

Loading faq...

About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

TMFHobo

@TMFBowman

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza and Planet Fitness. The Motley Fool recommends Marriott International, Restaurant Brands International, and Wingstop and recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.

Best Franchise Stocks to Buy in 2026

Key Points

Top franchise stocks to consider

1. Planet Fitness

Key Data Points

2. Marriott International

Key Data Points

3. Snap-on Tools

Key Data Points

4. RE/MAX Holdings

Key Data Points

5. McDonald's

Key Data Points

6. Wingstop

Key Data Points

7. Domino's

Key Data Points

How to invest in franchise stocks

Benefits and risks of investing in franchise stocks

Methodology: How these stocks were chosen

Should you invest in franchise stocks?

Related investing topics

Best Stocks to Buy Now: Our Buy-and-Hold Picks for August 2026

7 Best Food Stocks for 2026 and How to Invest

Investing in Restaurant Stocks

Best Growth Stocks to Buy in 2026

FAQ: Franchise stocks

About the Author

Read Next

Stocks Mentioned

Motley Fool Stock Advisor’s Latest Pick

Premium Investing Services

Best Stocks to Buy Now: Our Buy-and-Hold Picks for August 2026

7 Best Food Stocks for 2026 and How to Invest

Investing in Restaurant Stocks

Best Growth Stocks to Buy in 2026

FAQ: Franchise stocks

Are franchise stocks a good investment?

What is the most profitable franchise to own?

Do franchise stocks pay dividends?

How do franchise companies make money?

Are franchise stocks more stable than other consumer stocks?

Top franchise stocks to consider

1. Planet Fitness

2. Marriott International

3. Snap-on Tools

4. RE/MAX Holdings

5. McDonald's

6. Wingstop

How to invest in franchise stocks

Benefits and risks of investing in franchise stocks

Methodology: How these stocks were chosen

Should you invest in franchise stocks?

Related investing topics

Key Data Points

Key Data Points

Key Data Points

Key Data Points

7. Domino's

Key Data Points

Key Data Points

Key Data Points