Franchisee turnover is a key variable to the success of a franchise investment. Franchisee turnover ranges significantly in Commercial and Residential Services. The highest turnover of a franchise system in this sector is 400% and the lowest is 0%.
We dig deeper into turnover and look at the number of transfers, terminations, non-renewals, reacquired and ceased operations of each franchise system within our System Turnover Grade.
A growing system is a sign of a healthy investment opportunity. Growth rates can be very high if a smaller system grows from 5 to 20 outlets compared to another system that has grown from 250 to 300. Also a number of franchise systems in Commercial and Residential Services have negative growth, or have shrunk in size. The largest growth rate is 1500% and the worst growth rate is -100%.
We dig deeper into growth and look at net growth, if it’s consistent, how many has the franchise system sold but no opened and their projections for next year in our System Growth Grade.
Franchise systems are not required to disclose financial performance information of their franchisees to you. In the Commercial and Residential Services sector, only 66% disclose any type of financial information. Some franchise systems only provide a small amount of revenue data (not expenses) and only a few healthy franchise systems will provide expense data. Within the Commercial and Residential Services sector, only 23% disclose expense data for you to study the costs of running the business.
We dig deeper into financial transparency, compare the value of the information and highlight the benefits and qualities of each value in our Item 19 Disclosure Grade.
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What are the top Commercial and Residential Services franchises?
The top Commercial and Residential Service investment opportunities will have a good investment structure, reasonable ongoing fees, healthy franchise relations, beneficial franchisee rights, low outlet turnover, quality outlet growth, and valuable financial transparency.
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