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Keep the population and period consistent

Read the actual headings, reporting periods and outlet types. Company-owned and franchised units are different groups. Termination, nonrenewal, transfer and closure are not interchangeable categories.

Net growth alone establishes neither operator success nor support quality. Use the described contacts and records to investigate the specific questions raised.

Sources: Federal Trade Commission: Item 20: Outlets and franchisee information

Net growth leaves important questions open

Fictional example: a counted population begins at 20 units, adds eight and has five leave it. It ends at 23, a net increase of three. The calculation does not say why the five left or whether the new units are performing as expected.

Check the real categories before interpreting departures; do not label them all failures or treat every transfer as an outlet closure. Growth also raises a separate question about the resources available to support the larger network.

Sources: Federal Trade Commission: Item 20: Outlets and franchisee information

Scope

  • This explains the selected federal disclosure item. State and territorial requirements and the terms of the particular offer remain separate.

Next step

Read the period and categories before comparing totals, and use current/former operator information to investigate specific changes.

Sources & review notes

Federal Franchise Rule

FTC overview · Compliance Guide · Guide PDF · Current regulation

The Compliance Guide is May 2008 explanatory guidance. The current regulation and later official updates control current requirements and dollar amounts; state and territorial rules are separate.

The source records distinguish access dates from substantive review dates. Updating an explanation does not itself recheck the law.

16 CFR §436.5(t): FDD Item 20

Federal Trade Commission

Passage, dates and research notes

primary · Item 20: Outlets and franchisee information

the number of franchised and company-owned outlets

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.

16 CFR §436.6: FDD preparation and records

Federal Trade Commission

Passage, dates and research notes

primary · section-436.6

Respond fully to each disclosure Item.

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.

Detailed rule records (1)
FDD Item 20: Outlets and franchisee information Source checked

Item 20 contains outlet tables and prescribed current/former franchisee information, with defined categories and periods. Net growth can coexist with terminations, non-renewals and transfers. System size alone does not establish support quality or investment outcomes.

When to check: Preparing, updating or comparing an FDD. Source review: 2026-11-12.

16 CFR §436.5(t): FDD Item 20
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