Franchise Glossary
Item 20
The FDD section that provides data on franchise system size, transfers, terminations, and closures.
Item 20 contains tables showing the number of franchised and company-owned units opened, closed, transferred, and terminated over the past three years. This data reveals the health and growth trajectory of the franchise system. A pattern of high turnover, many terminations, or declining unit counts can be a red flag. Item 20 also includes a list of current and former franchisees with contact information — these are the people you should call during the validation process.
Related Terms