Is Tractor Supply a Franchise? How to Invest in This Retail Giant
With record annual revenues exceeding $13 billion across over 2,300 stores, Tractor Supply Company has become the leading farm and ranch focused retailer in the US. Understandably, interested investors wonder if they can get a piece of this success story by opening a Tractor Supply franchise location.
The answer is no – Tractor Supply does not currently offer any franchising opportunities, and all locations are corporate owned. However, don‘t let that discourage you! Read on to understand why Tractor Supply chooses this strategy and how you still have attractive options to invest in this thriving company.
Why Tractor Supply Chooses Corporate Ownership
A bit of history first. Tractor Supply was founded in 1938 as a mail order tractor parts business before opening its first retail store in 1939. After going public on the NASDAQ stock exchange in 1994, the company has seen relentless growth into the Fortune 500 rankings.
With its stores averaging over $9 million in annual sales on large formats of 15,000+ sq ft, the upfront investment for an individual franchisee would be prohibitive. Petsense, their pet store subsidiary, allows franchises but has a much smaller 3,000 sq ft footprint.
As a destination retailer for hobby farmers and ranch owners, Tractor Supply‘s wide assortment (over 35,000 SKUs currently) and inventory requirements also make corporate ownership a better fit than individual franchisees.
The results speak clearly – by retaining ownership, Tractor Supply has achieved industry-leading sales per square foot and consistent 20%+ return on invested capital over the past decade. Their formula clearly works!
Plenty of Ways to Invest in Tractor Supply‘s Ongoing Growth Story
Just because you can‘t open a franchise location doesn‘t mean there aren‘t great options to benefit from Tractor Supply Company‘s momentum. Here are a few ways for investors large and small to consider:
| Investment Option | Description |
|---|---|
| Purchase TSCO Stock | Tractor Supply shares have nearly doubled in the past 5 years. While valuations are higher than historical averages, most analysts remain bullish with stable earnings growth expected. |
| Invest in Commercial Real Estate | As a trusted anchor tenant with excellent credit, Tractor Supply stores generate landlord returns averaging 10-12% per year. Big opportunity as they expand to new rural markets! |
| Open a Franchise with a Competitor | Chains like Rural King, Atwoods, Runnings allow franchising in regions not already served by Tractor Supply. Leverage their proven models! |
| Start Your Own Independent Store | With a more targeted local focus, independent farm/ranch stores can still thrive in the right community. Partner with regional brands and manufacturers. |
Data Source: Tractor Supply Investor Reports, S&P Capital IQ, Franchise Disclosure Documents
As you can see…
