FDD Item 20
Outlets and Franchisee Information
FDD Item 20 discloses unit-count data: total franchised and company-owned units, openings and closures over the past three years, projected openings, and contact information for every franchisee in the system.
Why It Matters
Item 20 is the systemwide health-check. The opens-vs-closes ratio over three years is the single most predictive metric for franchise system trajectory. The franchisee contact list is also the source for validation calls.
What Item 20 Must Disclose
- Total franchised and company-owned units by year for the past three years
- Openings and closures by year, including transfers, non-renewals, and terminations
- Projected openings in the next fiscal year
- Name, address, and phone of every current franchisee
- Name and last known contact information for franchisees who left the system in the past year
What to Look For
- Closing-to-opening ratio above 1.0 — the system is shrinking
- High transfer rates — franchisees are selling out rather than continuing
- Long lists of recently-departed franchisees — call them; they have nothing to lose by being candid
- Concentrated geography — heavy growth in one region may indicate the brand doesn't travel well
Go Deeper
Item 20 of the FDD: How to Read Franchise Unit Data Like a Pro
Item 20 is the most underrated section of the FDD. It reveals how many units opened, closed, and transferred — and it gives you the contact list for every franchisee in the system.