Franchise FDD Item 20: Outlets and Franchisee Information

Item 20 of the FDD provides information about the current and former franchise outlets within the franchise system. This item is crucial for potential franchisees as it offers insights into the size and growth of the franchise network and provides details about the status of individual franchise units.

Here are the key components typically found in Item 20:

20.1 Table of Outlets:

• Table of Outlets: A table summarizing the current and former outlets within the franchise system. This may include information such as the name and address of each outlet, the franchisee’s contact information, and the outlet’s status (open, closed, transferred, etc.).

20.2 Franchisee Contact Information:

• Franchisee Contact Information: Contact information for current and former franchisees, allowing potential franchisees to reach out for additional insights and information.

20.3 Initial Investment:

• Initial Investment Information: Information about the initial investment required for each outlet, which may include the initial franchise fee, equipment costs, leasehold improvements, and other expenses.

20.4 Franchisee’s Experience:

• Franchisee’s Experience: Background information about the franchisee, including their business experience and any previous business ownership.

20.5 Litigation History:

• Litigation History: Details about any litigation history involving the franchisor, franchisees, or the franchise system.

20.6 Bankruptcy History:

• Bankruptcy History: Information about any bankruptcy history involving the franchisor or franchisees within the franchise system.

20.7 Outlet Closures:

• Outlet Closures: Details about any outlet closures, including the reasons for closure and the number of outlets closed within a specific time period.

20.8 Transfer Information:

• Transfer Information: Information about the transfer of franchise outlets, including the number of transfers and the reasons for transfer.

Purpose:

The purpose of Item 20 is to provide potential franchisees with a comprehensive overview of the current and former outlets within the franchise system. This transparency helps franchisees assess the overall health of the franchise network, the success of individual outlets, and the experiences of other franchisees.

Tips for Potential Franchisees:

• Review Outlet Table: Thoroughly review the table of outlets to understand the current and historical status of franchise units.
• Contact Current and Former Franchisees: Use the provided franchisee contact information to reach out to current and former franchisees for insights into their experiences.
• Evaluate Initial Investment: Assess the initial investment information to understand the costs associated with opening a franchise unit.
• Consider Closure and Transfer Information: Consider the reasons for outlet closures and transfers, and inquire about the franchisor’s support in such situations.

By thoroughly examining Item 20, potential franchisees can gain valuable insights into the performance, history, and experiences of outlets within the franchise system. This information is crucial for making informed decisions about entering into a franchise agreement and understanding the potential challenges and successes within the franchise network.

LINK TO FRANCHISE DISCLOSURE DOCUMENT (FDD) ITEMS WITH BRIEF EXPLANATIONS ON FranchiseFDD.com

1. Item 1: The Franchisor and Its Predecessors, Affiliates, and Certain Employees
2. Item 2: Business Experience
3. Item 3: Litigation
4. Item 4: Bankruptcy
5. Item 5: Initial Franchise Fee
6. Item 6: Other Fees
7. Item 7: Estimated Initial Investment
8. Item 8: Restrictions on Sources of Products and Services
9. Item 9: Franchisee’s Obligations
10. Item 10: Financing
11. Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training
12. Item 12: Territory
13. Item 13: Trademarks
14. Item 14: Patents, Copyrights, and Proprietary Information
15. Item 15: Obligation to Participate in the Actual Operation of the Franchise Business
16. Item 16: Restrictions on What the Franchisee May Sell
17. Item 17: Renewal, Termination, Transfer, and Dispute Resolution
18. Item 18: Public Figures
19. Item 19: Financial Performance Representations
20. Item 20: Outlets and Franchisee Information
21. Item 21: Financial Statements
22. Item 22: Contracts
23. Item 23: Receipts

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