Franchising is an excellent way for a business to expand its operations quickly and gain a large market share without having to micro-manage each store.
Since Home Depot has over 2,000 stores across several countries, including the U.S., you may wonder, is Home Depot a franchise business? Here is what I’ve found out about this!
Is Home Depot A Franchise?
Home Depot is not a franchise but a corporation publicly traded on the stock market. The company is run by the Board of Directors, CEO, and Executive and Senior Leadership teams. The Vanguard Group is the largest shareholder of the company.
If you want to learn more about who the owners and shareholders of Home Depot are, whether Home Depot stores are individually owned, and much more, keep on reading!
Why Isn’t Home Depot a Franchise?
A company that chooses to franchise, such as Mcdonald’s, will offer its stores or restaurants for a fee to the public.
Entrepreneurs can own these individual stores while receiving support and products from the parent company.
In return, the franchisee, or owner of the individual store, will have to pay royalty fees to continue doing business under the company name.
Note that this business model can help big chains become more widespread through local methods and become a part of the community.
Alternatively, for Home Depot, this model of business is not ideal as each store has 10,000s of products and requires a large capital investment to build the stores.
When compared to a fast-food chain, the cost of opening a Home Depot store would not be possible for someone wanting to own a franchise.
Additionally, with Home Depot having full control and ownership of its stores, they are able to hold onto more profits.
When you combine all these reasons, it’s no surprise that Home Depot is not a franchise.
Who Owns Home Depot?
Home Depot is currently run by its Chairman of the Board and CEO, Craig Menear, with its headquarters in Atlanta, Georgia.
The idea of The Home Depot was first formed by its founders, Bernie Marcus and Arthur Blank, in 1979.
After exponential growth, the shares in the company became available on the American stock market, and investors could purchase a single share for $12 each on NASDAQ.
By 1989, the company had opened its 100th store and accumulated a reputation as America’s largest home improvement retail store.
Home Depot also owns approximately six companies that reflect its customer-focused retail approach and help Home Depot offer more services to its customers, including:
- Interline Brands Inc.
- Redbeacon
- The Company Store
- com
- HD Supply
- Compact Power Equipment
Who Are The Shareholders Of Home Depot?
Here are the top five shareholders that own stakes in Home Depot (as of 2024):
- The Vanguard Group (8.30% Stake)
- SSgA Funds Management Inc (4.52% Stake)
- BlackRock Fund Advisors (4.36% Stake)
- Capital Research & Management Co (3.67% Stake)
- Fidelity Management & Research Co (1.68% Stake)
Note that these investors are also known for owning shares in competing companies such as Lowe’s and Walmart.
Are Home Depot Stores Individually Owned?
Home Depot stores are not individually owned; they operate under the same parent company.
However, some stores may choose individual pricing, sales, opening times, and company policies depending on factors such as state law and their merchandise stock.
Other factors that can impact individual stores include whether the location is a high-income area or whether the store is in a quiet rural area, leading to different closing times.
Is Home Depot Considered A Private Business?
Home Depot is a publicly-traded company (and not a private business), with stock listed on both the New York and London Stock Exchange.
The retailer offers direct stock purchase plans for the public to allow them to purchase Home Depot company stock, and offers employees a 15% discount on company stock.
If you want to know more about Home Depot, you can also read our related posts on Home Depot’s mission, what credit bureau Home Depot uses, and if Home Depot is in the UK.
Conclusion
Home Depot is not a franchise, and instead is a publicly-traded company founded in 1979 and expanded across the United States over a few years. This company is run like a traditional corporation and is owned by several shareholders.
Home Depot stores are not individually owned, and instead, they are run by the Board of Directors for Home Depot, including a number of shareholders and the CEO Craig Menear.
Other than that, Home Depot also owns many subsidiaries, such as Blinds.com, which helps the chain provide more services to its customers.
