Consumer Price Inflation, by Type of Good or Service (2000-2022)
The Consumer Price Index (CPI) provides a steady indication of how inflation is affecting the economy. This big picture number is useful for policymakers and professionals in the financial sector, but most people experience inflation at the cash register or checkout screen.
Since the start of the 21st century, U.S. consumers have seen a divergence of price movements across various categories. Nowhere is this better illustrated than on this chart concept thought up by AEI’s Mark J. Perry. It’s sometimes referred to as the “chart of the century” because it provides such a clear and impactful jump-off point to discuss a number of economic forces.
The punchline is that many consumer goods—particularly those that were easily outsourced—saw price drops, while key “non-tradable” categories saw massive increases. We’ll look at both situations in more detail below.
Race to the Top: Inflation in Healthcare and Education
Since the beginning of this century, two types of essential categories have been marching steadily upward in price: healthcare and education.
America has a well documented “medical inflation” issue. There are a number of reasons why costs in the healthcare sector keep rising, including rising labor costs, an aging population, better technology, and medical tourism. The pricing of pharmaceutical products and hospital services are also a major contributor to increases. As Barry Ritholtz has diplomatically stated, “market forces don’t work very well in this industry”.
Rising medical costs have serious consequences for the U.S. population. Recent data indicates that half of Americans now carry medical debt, with the majority owing $1,000 or more.
Also near the top of the chart are education-related categories. In the ’60s and ’70s, tuition roughly tracked with inflation, but that began to change in the mid-1980s. Since then, tuition costs have marched ever upward. Since 2000, tuition prices have increased by 178% and college textbooks have jumped 162%.
As usual, low income students are disproportionally impacted by rising tuition. Pell Grants now cover a much smaller portion of tuition than they used to, and the majority of states have cut funding to higher education in recent years.
Globalization: A Tale of Televisions and Toys
Even though essentials like education and heathcare have rocketed up, it’s not all bad news. Consumers have seen the price of some goods and services drop dramatically.
Flat screen televisions used to be a big ticket item. At the turn of the century, a flat screen TV would cost around 17% of the median income of the time ($42,148). In the early aughts though, prices began to fall quickly. Today, a new TV will cost less than 1% of the U.S. median income ($54,132).
Similarly, cellular services and software have gotten cheaper over the past two decades as well. Toys are another prime example. Not only are most toys manufactured overseas, the value proposition has changed as children have new digital options to entertain themselves with.
Over a long-term perspective, items like clothing and household furnishings have remained relatively flat in price, even after the most recent bout of inflation.
Ranked: The 20 Best Franchises to Open in the U.S.
Considering factors like the cost of investment and number of locations, this graphic breaks down the best franchises in the U.S.
Ranked: The 20 Best Franchises in the U.S.
The U.S. is famous for chain restaurants, franchised shops, and brand name hotels. One thing these franchises aim for is consistency in store feel, customer service, product offerings, and prices, no matter which state you’re in.
This visualization uses Entrepreneur’s annual Franchise 500 Ranking to showcase the best franchises in the U.S. worth owning, from Dunkin’ Donuts to Snap-on Tools.
The Best and How They Were Selected
The report assessed five broad categories to score the country’s famous chains:
- Costs & fees: including franchise fee, total investment needed to open one store, and royalty fees
- Support: including training times, marketing support, operational support, franchisor infrastructure, financing infrastructure, and litigation
- Size & growth: including open & operating units, growth rate, and closures
- Brand strength: including social media, system size, years in business, years franchising
- Financial strength & stability: including franchisor’s audited financial statements
A franchise was only considered if it was actively seeking new franchisees and must have already had at least 10 units operating.
Here’s a closer look at the top 20:
|Rank||Franchise||Initial Investment Needed||Global Units 2022|
|#1||Taco Bell||$576K - $3.4M||7,900|
|#2||Popeyes Louisiana Kitchen||$384K - $3.5M||3,851|
|#3||Jersey Mike's Subs||$194K - $955K||2,402|
|#4||The UPS Store||$122K - $508K||5,464|
|#5||Dunkin'||$438K - $1.8M||12,957|
|#6||Kumon||$67K - $146K||26,527|
|#7||Ace Hardware||$292K - $2.1M||5,746|
|#8||Culver's||$2.3M - $5.8M||871|
|#9||Hampton by Hilton||$12.3M - $22.8M||2,824|
|#10||Wingstop||$315K - $948K||1,873|
|#11||Tropical Smoothie Cafe||$277K - $584K||1,142|
|#12||Arby's||$629K - $2.3M||3,561|
|#13||KFC||$1.4M - $3.2M||26,498|
|#14||McDonald's||$1.4M - $2.5M||39,696|
|#15||Wendy's||$330K - $3.7M||7,049|
|#16||Servpro||$217K - $271K||2,050|
|#17||Smoothie King||$264K - $1.2M||1,373|
|#18||7-Eleven||$125K - $1.3M||81,887|
|#19||Budget Blinds||$141K - $212K||1,378|
|#20||Snap-on Tools||$201K - $465K||4,771|
The number one franchise, Taco Bell, has been in business since 1964 and has 7,900 locations as of 2022, spanning beyond the U.S. to Canada, Australia, Europe, and other regions of the world. The average cost of investment to be a franchisee is between $576,000 to $3.4 million.
While most of the top 20 are in the food service industry, there is also one hotel, one shipping company, and a few hardware and home goods stores that make the list.
Ace Hardware (#7), for example, which specializes in home improvement goods, is actually an international franchise with close to 6,000 units. Kumon (#6) is an education center and is the only non-U.S. franchise on the list.
The Feasibility of Being a Franchisee
To get a better sense of the costs needed to start a franchise, let’s take a look at one of the most famous convenience stores in the world. Here’s a sample of the different fees involved in 7-Eleven’s initial franchisee process:
|Initial Franchise Fee||$0 - $1,000,000|
|Initial Investment||$125,250 - $1,333,500|
|Cash Requirement||$50,000 - $250,000|
|Veteran Incentives||10-20% off franchise fee, up to $50,000; preferred interest rates and special financing|
|Ad Royalty Fee||1%|
|Term of Agreement||15 years|
|Is franchise term renewable?||Yes|
In terms of low-cost franchises, 7-Eleven is among one of the cheapest to open, according to Entrepreneur, sometimes costing less than $150K. Other franchises with lower cost barriers of entry include UPS ($122K – $508K) and Cinnabon ($112K – $547K).
There is more to consider than cost, of course, and some franchises provide better support than others in aspects such as financing, industry training, or legal support. Popeye’s, for instance, provides in-house financing for their franchise fee, as well as connections with third-party sources to help cover equipment, inventory, payroll, and other expenses.
Looking at feasibility in regards to opportunities, some of the fastest-growing franchises include chains like Jersey Mike’s Subs and Wingstop. Here’s a closer look at the Franchise 500’s fastest growing list:
- #1 Stratus Building Solutions
- #2 Jersey Mike’s Subs
- #3 Goosehead Insurance
- #4 Signal
- #5 Wingstop
In total there are almost 800,000 franchises in the U.S. The franchise market in the country has an economic output of over $825 billion and employs over 8.4 million people. With many of these franchises continuing to grow and seek new franchisees, there is ample opportunity in the market.
Money6 days ago
Ranked: The Highest Paid CEOs in the S&P 500
Retail2 weeks ago
Visualizing the Number of Costco Stores, by Country
Markets5 days ago
Charted: Market Volatility at its Lowest Point Since 2020
Culture2 weeks ago
Ranked: Which Countries Drink the Most Beer?
Markets5 days ago
Mapped: The Migration of the World’s Millionaires in 2023
Maps2 weeks ago
Mapped: The Deadliest Earthquakes of the 21st Century
Countries4 days ago
Charted: The World’s Biggest Oil Producers
Inequality4 weeks ago
Visualizing the World’s Growing Millionaire Population (2012-2022)