How We Score Franchises

Measures investment competitiveness and fee levels relative to the industry average. Franchises with lower investment requirements compared to peers score higher. Also considers whether financial performance data (Item 19) is disclosed and if average revenue data is available.

• Investment vs. industry average (Item 7)
• Franchise fee vs. industry average (Item 5)
• Item 19 financial disclosure availability
• Average revenue data presence

Evaluates the franchise system's size, stability, and growth trajectory using Item 20 data. Larger systems with positive net growth (more openings than closures) score highest. Declining networks with high closure rates score lower.

• Total system size (Item 20)
• Net growth rate (openings vs. closures)
• Closure rate relative to total units

Assesses legal and financial risk indicators from the FDD. Fewer litigation cases, no bankruptcy history, and available financing options all contribute to a higher score. This dimension rewards franchisors with clean legal records and financial stability.

• Litigation count (Item 3)
• Bankruptcy history (Item 4)
• Financing availability (Item 10)

Evaluates how franchisee-friendly the agreement terms are. Exclusive territories, longer agreement terms (more time to recoup investment), and comprehensive training programs all boost the score.

• Exclusive territory protection (Item 12)
• Agreement term length (Item 10)
• Training program duration (Item 11)

Measures how much data is available and disclosed. Franchises that provide more data points — investment ranges, fee structures, unit counts, financial performance — score higher. Item 19 disclosure is a particularly strong transparency signal.

• Data field completeness across FDD Items
• Item 19 financial performance disclosure