Why Is Costco Not A Franchise?

You might be aware that some major corporations franchise their retail locations, enabling independent business owners to own and operate big-name businesses. Some notable corporations that do this include McDonald’s, 7-Eleven, and KFC.

But to the dismay of anyone who might be interested in opening their own Costco Warehouse, Costco is not a franchise.

Rather, it is a publicly traded wholesale corporation. All Costco Warehouse retail stores are owned by Costco and its shareholders. Each store is operated directly by Costco’s corporate leadership. 

Costco Membership

The only entity with the right or power to open a Costco Warehouse location is the Costco Wholesale corporation. 

What’s the Reason?

Costco is known, of course, for its unbeatable prices on bulk groceries, home essentials, and major purchase items like mattresses, televisions, and more.

But they’re almost equally well known for their generous, fair, and equitable company policies. All Costco stores operate the same way in accordance with the same policies, and the company’s central leadership and decision-making power help ensure this can happen.

Franchise businesses are known for being a bit more “rogue” than a company like Costco. With a franchise, each location has a different owner who, in most cases, has the power to set their own prices and implement their own store policies. As a result, establishing continuity between store locations is much harder with franchise businesses.

In other words, the main reason Costco Wholesale does not franchise its retail locations is for the sake of consistency–consistency of policy and consistency of pricing. 

Non-franchise corporations also tend to be more profitable. While McDonald’s is the world’s largest and most profitable franchise, their earnings and economic standing still pale in comparison to the largest companies in the world.

Becoming a franchise simply wouldn’t be financially beneficial for Costco, which already enjoys immense success under their current business model.

How Big Is The Costco Wholesale Corporation?

According to the latest data, Costco is the 26th largest corporation in the world by revenue. They are considered larger than AT&T, Microsoft, BP, Chevron, and more. However, they place behind companies like Walmart, Amazon, and Apple.

As of January 2023, Costco Wholesale has retail locations in 15 countries worldwide, totaling about 850 warehouses.

The following is a list of countries where Costco retail locations can be found:

  • USA
  • Puerto Rico
  • Canada
  • Mexico
  • Japan
  • UK
  • Korea
  • Taiwan
  • Australia
  • Spain
  • France
  • China
  • Iceland
  • New Zealand
  • Sweden

As of January 2023, Costco Warehouse locations can be found in 46 of the 50 US states. Maine, Rhode Island, West Virginia, and Wyoming are the only states that do not have Costco locations.

One of the main ways Costco determines the locations for their stores is by examining membership data. As a Costco member, you voluntarily give Costco your name and address, meaning that Costco can calculate where their members are most concentrated and use this information to determine the ideal locations for their new warehouses.

Who Owns Costco?

The Costco Wholesale Corporation is a publicly traded American company governed by a board of directors.

In 2018, Costco Wholesale reported their principal shareholders as The Vanguard Group, Inc., based in Valley Forge, Pennsylvania, and BlackRock Inc., based in New York, New York.

Costco Revenue

The Costco Wholesale corporation produces about $22 billion in revenue each year according to the latest data. Of this, each Costco Warehouse produces between $130 million and $200 million per year.

Other Ways To Get Involved With Costco

The two best ways to get involved with Costco’s business dealings is to either become an employee or invest in Costco stock (or both!).

According to an article from Fool.com, Costco is known as a “promote-from-within” company. This means that if you aren’t already part of the Costco team as an everyday employee, your chances of moving up into the ranks of their leadership is much lower. According to Costco’s former CEO Jim Sinegal, very rarely do[es Costco] hire somebody from outside the company.”

If you’re interested in investing in Costco stock, click here.


How long does it take to build a Costco store?

About 3-6 months. Ali Moayeri, Senior VP of Construction for Costco, has been quoted saying that his construction crews can build a metal warehouse in as little as 110 days, but that the schedule often affords the crew six full months.

What is the most profitable Costco store location?

The Iwilei warehouse location on Oahu, Hawaii. This location processes about double the revenue of any other Costco Warehouse location each year (about $300 million).

Does Costco own its warehouses?

Yes. All Costco Warehouse locations are owned directly by Costco Wholesale.

Does Costco franchise in the UK?

No. While Costco has about 30 retail locations throughout the United Kingdom, they do not franchise any of their stores.

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