Franchising is the most dynamic engine of small business growth. As the industry continues to evolve these key trends are ones to watch for when investing in a franchise system.
The composition of the franchise investment more than likely differs in key areas such as: franchise fees, royalty rates, territory protections and Item 19 disclosures.
In order to view any differences, Franchise Grade analyzed the changes to the investment offering of 1,551 franchise systems in our database from 2013 to 2016.
We discovered that most franchisees who invested in a franchise several years ago are more likely to invest in the same franchise system again today. This is an excellent sign that the franchise industry is trending in a positive fashion and continues to grow and provide the job satisfaction that franchisees are looking for when making their initial purchase.
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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.
A Franchise Disclosure Document (“FDD”) presents key components of the franchise program including the obligations of the franchisor and franchisees.
As franchise system development becomes more competitive franchise systems are employing a new strategy to grow their brand and increase franchise sales.
Data has become essential to having a successful franchise development team. Those that maximize the power of data will sell more franchises.
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.