Home Reports Sold But Not Open: Why and When Franchises Never Open for Business

Sold But Not Open: Why and When Franchises Never Open for Business

2017 Facts & Figures Report Published on March 08, 2017

Franchise Grade is the leading franchise research company in the world. Our goal is to be the first to introduce you to industry trends. This is how we do it – our database – which includes:

20 million data points
450 thousand franchise contacts
18 thousand candidate profiles
12 thousand executive contacts
10 thousand Franchise Disclosure Documents (FDD)s
4 thousand franchise systems

Franchise Grade data scientists scour this database to discover and analyze relevant content with the intention of educating franchising stakeholders and introducing them to key opportunities. We input all this data, all this specialized insider knowledge, into our Facts and Figures report and deliver it directly to you.

Facts and Figures Report

Franchise Grade offers you the Facts and Figures Report “Sold But Not Open: Why and When Franchises Never Open for Business”. In this report, you’ll find detailed information on an overlooked category in Item 20 of the FDD, which includes franchise agreements that are signed, but not yet opened – also known as – Sold but not Opened (SBNO). We analyzed 1,003 franchise systems from 2012 to 2015, as well as compared 10 franchise sectors in order to properly evaluate the data. Read on to find out why you should be cautious with your franchise investment when the SBNO doesn’t convert into increased franchise locations.

About the Author: Jeff Lefler
As the CEO of FranchiseGrade.com, Jeff understands that there is no Silver Bullet or sure-fire, simple way to pick a guaranteed franchise system winner. However, by using a little science and a lot of hard work, Jeff and the team at FranchiseGrade.com have developed a sophisticated research, analysis and comparison model to help potential investors and existing Franchisees assess a realistic value for any franchise system relative to others. It's called a Franchise Grade. With over fifteen years of small business experience and ten working in franchising as a multi-unit Franchisee, consultant and Franchisee Association President, Jeff has a good understanding of the level of hard work, dedication and commitment that drives a successful franchise system. As part of his ongoing involvement with the industry, Jeff also served as a Member of the Strategic Committee of the International Association of Franchisees and Dealers. Get in touch with Jeff to see how your system measures up at jeff.lefler@franchisegrade.com.

Facts and figures sold but not open franchise grade final 1200x1553

Thinking about buying a franchise?
Not sure how much can you afford?

Fill out our Franchise Affordability Calculator

START NOW

A Study of Ongoing Fees Between 2013 and 2016

We have completed a study on the changes in Ongoing Fees in the franchise industry using our data from 2013 – 2016 to publish the report.

The Franchise Disclosure Document Shouldn’t be a Secret

A Franchise Disclosure Document (“FDD”) presents key components of the franchise program including the obligations of the franchisor and franchisees.

The Complication of Buildouts in FDDs

As franchise system development becomes more competitive franchise systems are employing a new strategy to grow their brand and increase franchise sales.

Historical Trends of Key Franchise System Metrics

The composition of the franchise investment differs in key areas such as: franchise fees, royalty rates, territory protections and Item 19 disclosures.

Maximize the Power of Data to Sell More Franchises

Data has become essential to having a successful franchise development team. Those that maximize the power of data will sell more franchises.

Item 20 Errors Reflects on Franchisor Performance

When reviewing an FDD, we always keep our eyes out for any errors. The error that is the most troublesome for us is when we see Item 20 errors.