Item 20 includes a series of tables containing critical information about the franchise's outlet growth over the past three years. This includes a classification of franchisee terminations, franchises sold but not opened, and other key data you can use to identify system-wide trends, year over year.


  • Analyze the volume and frequency of outlet openings and closures, to identify any system-wide patterns or trends.

Important Considerations

  • Franchisee turnover and growth are two of the most important indicators of a franchise brand's performance. A successful franchise brand will grow at a sustainable rate and have little turnover.
  • Is the franchise system growing at a sustainable rate, or is growth negative or flat?
  • If the number of franchises that are indicated as "Sold But Not Opened" is growing faster than the number of outlets opening, this a concern that should be investigated further.
  • Where is the franchisor locating new outlets? Are there particular regions or parts of the country left undeveloped? Will your franchise location be in a distant or remote market?
  • How many new franchisees have joined the system?
  • How many franchisees have left the system?
  • Was it a termination or did they decide to cease to operate?