Is CVS a Franchise In 2024? (Not What You Think…)

With over 10,000 locations and $300 billion in annual revenue, CVS Health dominates the US healthcare and pharmacy market. But with its mammoth size and rapid expansion across 49 states, many wonder – is CVS a franchise?

As a retail industry analyst, I decided to investigate. And the answer may surprise you.

No, CVS is Not a Franchise

CVS Health operates as a publicly traded corporation, not a franchise. It owns 100% of its nearly 10,000 US pharmacy and health stores. Regional managers oversee local operations, but major decisions come down from national corporate leadership.

Compare this to franchises like 7-Eleven, where local store owners pay royalties back to the corporate HQ. Franchisees manage their own locations and reap the profits.

So why has CVS chosen to own all its stores instead of franchising? Control. With uniform operations coast-to-coast, CVS provides consistent service while keeping costs low. It leverages its size to command the best deals from vendors. Margins may be lower than a franchise model, but CVS makes up for it with sheer volume.

CVS by the Numbers

CVS continues its explosive growth, propelled by acquisitions like Aetna while also opening 70-80 new stores each year. Here are some key stats that showcase its massive size and scale:

• 71,000 employees
• 10,000 retail locations
• 1,100 walk-in health clinics
• 107 million total customer visits annually
• 30% market share of retail pharmacies

Meanwhile, net revenues topped $315 billion in 2022. CVS clearly wins when it comes to national footprint and distribution power.

How Stock Ownership Fuels Growth

Publicly traded on the NYSE, CVS has many individual and institutional shareholders that own a piece of the company:

With access to public capital markets, CVS can raise money from stock offerings to fund new clinics and pharmacy locations. Shareholders have fueled CVS‘s growth through acquisitions like Aetna while remaining hands-off in day-to-day management.

Franchise vs. Corporation: Key Differences

Franchises allow rapid location expansion, but they sacrifice profit margins and operational control relative to public corporations. Here are the key contrasts between these major retail/pharmacy models:

Franchise

• Local owners operate locations
• Pay royalties to parent organization
• Higher profit potential than corporations
• Less operational control

Public Corporation

• Shareholders own company
• Corporate leadership runs operations
• Lower profit margins due to volume discounts
• Uniform operations and consistent customer experience

CVS falls firmly on the public corporation side – it prioritizes control, volume, and consistency over profit margins at individually owned locations.

Top Retail Franchises

CVS sticks to the public corporation structure for now. But competitors like Walgreens franchise some locations, as do other major retail chains:

• 7-Eleven
• Circle K
• Ace Hardware
• True Value
• Albertsons (some regions)

The verdict? While you won’t be able to buy into your local CVS pharmacy franchise anytime soon, other retail options exist for prospective franchisees. But they’ll have a tough time competing with the pharmacy Goliath.

The Bottom Line: Why CVS Won‘t Franchise

With 70+ years of runaway growth as a public corporation, don‘t expect CVS to start offering pharmacy franchises now. The public model allows CVS maximum control and visibility over locations, fueling insane growth through stock offerings, acquisitions, and leveraging scale efficiencies.

Sure, franchising could juice profits – but CVS plays the long game. And as the largest US pharmacy by far, whatever they’re doing seems to be working!

So while small business owners can buy into retail/pharmacy franchises from 7-Eleven, Circle K, and more, CVS continues chugging along as a shareholder-owned corporation. And with its shares up 30% this past year, don‘t expect that to change any time soon!