U.S. Franchise Market Report 2026: Unit Growth, Closures, Fees and SBA Default Rates by Brand

The franchise failure rate is a myth in both directions. Census microdata give franchised start-ups a survival edge of five to six points that disappears after the second year, and the federal loan file shows SBA charge-off rates that run from zero at Planet Fitness and Club Pilates to 28.7% at iLoveKickboxing. MMCG Invest reads 832,521 establishments, several hundred franchise disclosure documents and the SBA loan record to show lenders where the risk in franchising actually sits: in the brand, the site and the capital stack, not in the model.

Most franchise credit memos in the United States carry one of two numbers that are wrong. The first is some version of the claim that 95% of franchises succeed. That figure has a traceable pedigree: a 1992 Arthur Andersen study for the International Franchise Association found 96.9% of units opened in the previous five years still operating, Department of Commerce franchisor surveys in the 1980s reported annual discontinuance under 4%, and a 1968 IFA book claimed 1.6%. Every link in that chain rests on franchisor self-reports (10). The second number is the counter-claim, usually a charge-off percentage lifted from one of the single-purpose default websites that have appeared since 2024. Their headline franchise rates range from 4.3% to 17.3% depending on who is counting, what counts as a default, and which loans sit in the denominator (16, 20).

Neither tells a lender anything useful about the loan in front of it. The evidence assembled for this report points somewhere else. Franchising as a model carries a small, short-lived survival advantage and then no advantage at all. What varies enormously is the brand, the site and the amount of debt placed on a unit whose owner earnings, after royalties and a market-rate manager, are often in the low five figures. Those three variables, not the franchise label, explain almost all of the dispersion in the federal loan record.

Where we cite a brand figure, it comes from a filed FDD, a 10-K, a court declaration or the SBA loan-level file, and we say so. Where a figure is our own computation, we label it an MMCG estimate. Sector reports follow this piece.

The industry's own count, produced by FRANdata for the IFA, puts the United States at 832,521 franchise establishments in 2025, producing $907.3 billion of output and nearly 8.8 million direct jobs. The 2026 forecast is 845,000 establishments, $921.4 billion and roughly 8.9 million jobs, which is growth of about 1.5% in units and 1.6% in output (1). Growth ran between 1.5% and 2.9% a year from 2021 to 2024 and slowed to 1.3% in 2025. The forecasts miss by more than that: the 2025 Outlook had projected 851,402 units and $936.4 billion of output for 2025, and the actual estimates came in 2.2% and 3.1% lower (2). Treat the IFA series as accurate to plus or minus 2% to 4%.

The only federal census is nine years old. The 2017 Economic Census counted 498,328 franchise establishments, 9.59 million employees and $1.7 trillion in sales under a narrower definition, with 83% of establishments franchisee-owned and 17% franchisor-owned (3). The two counts cannot be reconciled and should not be averaged. The IFA number includes sectors and establishment types the Census excludes, and the Census sales figure includes franchisor-owned volume the IFA treats differently. We use the IFA series for trend and the Census for the ownership split.

Roughly 9,000 brands are active across the 50 states. New brand formation averaged 322 a year before the pandemic and 383 a year after it, peaking at 414 in 2022 (1). Most of those brands are small, and most will not last the length of their own franchise agreements. Shane's study of 157 systems that began franchising between 1981 and 1983 found that roughly three-quarters of new franchise systems fail within twelve years, against an average agreement term of fourteen (9). Nothing in the later literature has overturned that result.

Ownership is concentrating. FRANdata's 2026 analysis finds that 19.3% of franchisees operate more than one unit and that this minority controls 58.8% of all franchised locations, up from 54% in 2019 (4). The 200 largest restaurant franchisees generated $57.4 billion across 33,635 restaurants in 2025; Flynn Group alone reported $4.9 billion of revenue and 1,321 Pizza Hut units (5). Private equity owns the other side of the table. FRANdata estimates that more than 12.4% of active brands have private equity ownership or backing (56). Roark Capital completed its purchase of Subway for a reported $9.6 billion in April 2024 and separately controls Inspire Brands, with more than 33,400 locations across six brands (6). Restaurant Brands International bought Carrols, then its largest Burger King franchisee, for about $1.0 billion of enterprise value in May 2024 with a plan to refranchise most of the 1,022 restaurants over seven years (5).

For a lender the implication is simple. The franchisee who walks into a branch with a single-unit SBA request is now the exception in the system, not the norm, and the franchisor on the other side of the agreement is increasingly a financial owner with a securitization to service. Both facts bear on the credit.

Closures in franchising do not arrive the way they arrive in retail, where MMCG's Great American Store Closure Tracker counts them chain by chain and the U.S. Retail Market Report 2026 shows most of the vacated space being leased again. A department store chain closes stores when it fails. A franchisor closes stores when it decides to, and announces the number on an earnings call. The 2025 ledger is therefore two lists: brands that grew, and brands that programmed their own contraction.

The growth list is short and concentrated. Wingstop added 382 net domestic restaurants in fiscal 2025 to reach 2,586, more than 90% of them opened by existing franchisees, while domestic same-store sales fell 5.8% in the fourth quarter and average unit volume slipped from about $2.14 million to $2.0 million (26). Domino's opened 179 US stores and closed 7, ending the year at 7,186 (25). McDonald's added 149 net US restaurants to reach 13,706 (85). Planet Fitness opened 181 clubs and reached 2,896 systemwide; Crunch grew its franchised base from 415 to 481 (37). Valvoline added 170 stores to reach 2,180, with system sales up 11% to $3.45 billion (80). Nothing Bundt Cakes added a net 119 units to reach 779. 7 Brew nearly doubled, from 321 to 602 drive-thru stands, and Franchise Times' coffee and tea category grew sales 32.5% to $3.5 billion (75, 83). Hand & Stone went from 487 to 600 franchised spas between 2023 and 2025, and Home Instead's average franchise gross sales rose from $2.61 million to $2.75 million (79).

The contraction list is longer and, for lenders, more instructive, because every entry on it was disclosed in advance.

Subway's 2026 FDD shows US franchised outlets falling from 20,576 at the start of 2023 to 18,773 at the end of 2025, with 1,026 outlets ceasing operations in 2025 alone and 792 temporarily closed at year end (32). Pizza Hut recorded 55 openings against 261 closures in 2025, taking the US system down 3.9% to 5,031, and Yum's chief financial officer said about 250 more underperforming units would close by July 1, 2026 under "Hut Forward" while the brand itself was put up for sale (29). Papa John's announced about 300 North American closures by the end of 2027, roughly 200 of them in 2026; the targeted restaurants are more than a decade old, average under $600,000 in sales and typically generate negative four-wall income against a system average of $1.1 million (28). Wendy's FY2025 annual report expects Project Fresh closures "to total 5% to 6% of our total restaurants in the United States," which the interim chief executive put at 298 to 358 restaurants on top of 28 closed in the fourth quarter; US systemwide sales fell 5.2% to $11.9 billion and franchisee EBITDA margins fell 270 basis points to 9.3% (27). Jack in the Box closed 86 restaurants and opened 31 (30). Dine Brands franchisees opened 73 Applebee's and IHOP restaurants and closed 110 (31).

Casual dining as a whole grew Technomic Top 500 sales 2.9% to $67.7 billion in 2025 while cutting units by about 45 to 16,269. Texas Roadhouse, Chili's and Olive Garden accounted for $1.7 billion of the $2 billion in full-service sales growth; without them the segment grew under 0.4% (33). TGI Fridays' US footprint went from 269 restaurants to 71 between early 2024 and September 2026. Hooters filed Chapter 11 in March 2025 with 151 company stores after 48 closures, and sold its company units to a franchisee group (54, 55). Denny's closed 66, 57 and 89 restaurants in 2022, 2023 and 2024, guided 70 to 90 for 2025, and left the public market in January 2026 at $6.25 a share, bought by a group that included the franchisee Yadav Enterprises (31).

Outside restaurants the pattern repeats in every sector that over-expanded between 2019 and 2023. Xponential Fitness recorded 140 studio closures in 2025 against 341 gross openings, a 4.5% closure rate, and guided to 3% to 5% in 2026 (38). Orangetheory's franchised base fell from 1,311 to 1,209 studios over 2024 and 2025 while openings fell from 53 to 13. Anytime Fitness declined three years running to 2,271 US centers, and F45 contracted from 753 to 708 locations with 26 openings against 56 closures (39). Regis fell from about 5,500 salons at fiscal year-end 2022 to 3,829 at December 31, 2025 (40). Jackson Hewitt's franchised offices dropped from 3,413 to 2,744 and Liberty Tax's from 1,991 to 1,537 over their most recent three-year Item 20 windows (41). RE/MAX's US agent count fell 6.1% (82). Scooter's Coffee's net franchised additions fell from 204 to 57 over three years as landlords began to resist duplicate coffee tenants (75). Crumbl's Item 19 average fell from about $1.84 million in 2022 to $1.14 million in 2025, the 2026 FDD dropped profit disclosure altogether, and at least 57 shops closed in 2026 through October 1 (78). Express car wash openings fell from 943 in 2022 to about 550 in 2025 and Zips Car Wash filed Chapter 11 with $653.9 million of funded debt (76). The Picklr grew from 22 to 56 franchised clubs in 2025, filed Chapter 11 in October 2026, and its corporate club entity's rent consumed about 62% of revenue (77).

Hotels tell the same story in a different unit of account. US RevPAR was flat or down at every major franchisor in 2025: Hilton US -0.8%, Choice US -3.0%, Wyndham US -4%, IHG US -0.1%, Marriott US and Canada +0.7% (34, 35, 36). Choice cut US rooms 2.9% to 496,979 and its pipeline fell from over 95,000 rooms to about 77,800 during the year; IHG's Americas system grew 0.2% net after 3.3% removals. Hilton's 6.7% net unit growth and record 520,500-room pipeline are real, but they are increasingly international. The domestic select-service system that SBA and USDA lenders actually finance is close to flat.

Two conclusions follow. First, the closures that matter to a franchise lender in 2026 are not failures in the Item 20 sense. They are franchisor decisions about which end of the AUV distribution to prune, and a borrower in the bottom cohort of a pruning brand is exposed to that decision regardless of its own debt service coverage. Second, growth itself is a risk marker where it outruns same-store sales. Wingstop, Scooter's, Crumbl and The Picklr all showed the pattern in which unit additions continued after unit-level revenue turned down.

The best study of franchise survival uses Census Bureau microdata rather than franchisor surveys. Lafontaine, Zapletal and Zhang link new single-establishment businesses in the Census files and find that franchised start-ups survived their first year at a rate 6.3 percentage points higher than independents and their second year 8.4 points higher. With controls, the edge narrows to about 5 and 6 points. The authors describe it as "quite small relative to what is claimed in the trade press," and the benefit is one-time: "conditional on surviving a year or two, we no longer find survival (or growth) differences" (7). The franchise premium, in other words, buys a borrower through the opening period and nothing after it.

Earlier cohorts did worse. Bates tracked 20,554 young firms in the Census Characteristics of Business Owners database and found that by late 1991, 34.7% of franchisees had discontinued against 28.0% of non-franchised firms. In retail the franchised survival rate was 61.3% against 73.1% for independents (8). Holmberg and Morgan's study of Item 20 data for 834 systems and more than 250,000 outlets found a 1997 median annual turnover of 10.49% including transfers and 5.54% excluding them, with means of 15.99% and 11.33% (10). By sector, turnover including transfers ran from 5.9% in restaurants to 14.7% in travel.

Item 20 itself is built to understate. The FTC Rule requires five tables covering the franchisor's last three fiscal years, and it defines termination, non-renewal, reacquisition and transfer with precision while leaving "ceased operations for other reasons" as a residual (19). Three design features matter to anyone trying to compute a closure rate from these tables. Each outlet's change in status is reported only once, and where several events occur the franchisor reports "the event that occurred last in time," so a franchisee who is defaulted, bought out and then closed appears in one column. Franchisees who signed and never opened appear only in the projected-openings table; if they leave the system before opening they appear in no chart at all and are listed only among former franchisees (20). And the tables cannot see the resale of a failing unit, which appears as a transfer, a category many analysts exclude from turnover entirely.

The FTC's March 2026 judgment against Xponential Fitness is the first large federal enforcement action to turn partly on the integrity of these tables. The agency alleged that Xponential's FDDs omitted numerous former franchisees whose studios had been terminated, cancelled, not renewed or otherwise ceased business (38). A lender who takes Item 20 at face value is relying on a document that the franchisor compiles, that the rule allows to be compiled generously, and that until 2026 nobody had been penalized for compiling badly.

For the brand-level work in this report we compute closure rate as terminations plus non-renewals plus ceased operations, divided by franchised outlets at the start of the year, and we report turnover with and without transfers and reacquisitions as separate fields. Every three-year window is reconciled across successive FDDs before a trend is drawn. That is more work than reading the summary table, and it is the only way to produce a number that means the same thing from one brand to the next.

The federal government has looked at brand-level franchise loan performance three times, and each time it reached the same conclusion.

GAO reported in 2013 that SBA guaranteed about $10.6 billion of franchise 7(a) loans between fiscal 2003 and 2012 and "made guarantee payments on approximately 28 percent of these franchise loans, representing about $1.5 billion." In its review of one franchise organization, 63% of the 88 loans examined had defaulted. GAO also found discrepancies in SBA's franchise data fields, including default status and loan counts (11). SBA's Inspector General, in the same year, found three high-volume franchises with default rates of at least 46% and loss rates over 18% on 2002 to 2009 loans, against 26% and 7% for similarly sized brands. SBA had disbursed nearly 1,000 loans to those three systems totaling $199 million, of which 501 loans and $84 million in guaranties defaulted. Franchise Times identified them as Planet Beach, Petland and Cold Stone Creamery (12). The FTC's 2024 Issue Spotlight analyzed 66,291 SBA-backed franchise loans originated between 2013 and 2023 and found a 3.9% default rate against 3.5% for comparable non-franchise borrowers, a difference the staff called statistically significant while declining to say franchise loans were necessarily riskier (14).

The Wall Street Journal's 2014 ranking, limited to chains with at least 100 SBA loans approved from 2004 to 2013, found that the ten worst brands accounted for $121 million, or 21% of all franchise charge-offs, with Planet Beach at 41.1% (13). Coleman Report data show franchise loan defaults rising from 3.1% in 2004 to 13.4% in 2008, and in the 2009 data the ten worst-performing brands carried an average loan of $173,060 against $742,594 for the ten best (18). Two Senate bills would have required SBA to publish brand-level defaults. Neither passed, and the 2014 ranking, the 2021 Senate staff report and the 2024 FTC analysis remain the most-cited franchise data of the last decade precisely because nothing replaced them (16, 90).

MMCG's own computation on the March 31, 2026 release of the SBA 7(a) loan-level file covers the fiscal 2010 to 2019 approval cohort, resolved loans only, so that every loan has had time to perform or fail. Franchise-flagged borrowers charged off 9.4% of resolved loans, 3,337 of 35,406, against 7.1% for all other borrowers (15). The sector spread inside that figure is wider than the franchise-versus-independent gap. Franchised childcare charged off 2.6%. Franchised restaurants charged off 11.4%, fitness 11.6% on 2,516 resolved loans, and auto repair 11.7%. SBA hotel loans, coded under NAICS 721110 and dominated by franchised flags, show a cumulative charge-off rate near 1.8% on about 25,447 loans and $44.2 billion since 1995, against roughly 6.4% for the seasoned all-industry book (15).

The brand spread is wider still. In our computation Planet Fitness shows no charge-offs on 111 resolved loans and Club Pilates none on 148, The UPS Store shows 2 charge-offs on 415 resolved loans from fiscal 2010 to 2019, or 0.5%, and Subway runs 7.2% on 1,197 resolved loans, while Anytime Fitness runs 12.2% and iLoveKickboxing 28.7% (15). Third-party analyses of the same file put Elements Massage at 3.3% on 75 loans, Great Clips at 5.1% on 609, Golden Corral at 15.3% on 184, Homewatch Caregivers at 16.7% on 78, Massage Heights at 23.3% on 121, Minuteman Press at 23.8%, Quiznos at 28.1% and Cold Stone Creamery at 32.3% (16, 20). The 2021 Senate staff report counted 55 charge-offs among 269 SBA loans to Dickey's Barbecue Pit franchisees from fiscal 2000 to 2020, 20% by count and 32% by dollars (90). FRANdata's October 2025 study of more than 18,000 SBA franchise loans worth about $8 billion reaches the same shape from a proprietary angle: brands in its high-risk tier carry a 15% charge-off rate and brands in its minimal-risk tier less than 2% (17).

The file has known limits, and anyone publishing from it should state them. The franchise flag depends on what the lender entered at origination; the IFA, citing FRANdata, estimates that about 20% of SBA loans go to franchises, while the FOIA flag captures only 9.9% of lending by count across fiscal 2010 to 2026, some 102,782 loans worth $79.7 billion across 5,914 recorded brand names (16). Every brand count from the file is therefore a floor. Brand names are not standardized, and third-party counts of distinct brands range from about 3,000 to about 5,900 depending on how aggressively they are merged. Published rankings cannot be compared with one another: some count charge-offs only and others add liquidations in process; denominators range from all disbursed loans to resolved loans only; minimum sample sizes range from 10 to 200. The 504 file reports no charge-offs at all, so brand-level 504 loss rates cannot be computed from public data (15).

What the file supports, read carefully, is a vintage-based brand measure with a stated denominator, and that is what the MMCG Franchise Brand Index publishes. It joins the resolved 7(a) record by brand to the brand's Item 20 unit flows and fee terms, discloses sample size and resolution period for every row, and refreshes annually against the quarterly FOIA release. Brands with fewer than 50 resolved loans are reported but flagged. The index is a floor on the volume side and a seasoned estimate on the loss side, and it is downloadable.

The lending data also answers a question most underwriters ask informally. Real estate is the dividing line in loss severity. Second-lien 504 debentures have charged off below 1.0% in every vintage since 2013 and below 0.5% in every vintage since 2017, against net charge-offs of 2% to 4% commonly cited for 7(a) (74). The franchise share of 504 is substantial: our count from the FOIA file is 11,390 franchise-flagged 504 loans worth $14.6 billion since fiscal 2010, with hotel flags carrying the largest tickets at $3.3 million to $3.8 million per loan (15). Where the specialist 7(a) book is stressed, it shows: First Internet Bancorp's FY2025 10-K reports franchise finance net charge-offs of 4.48% of loans in 2025 against 0.27% in 2024, and an 8.16% charge-off rate on its SBA 7(a) book (73).

The headline royalty has converged. Across 239 FDDs with a percentage royalty issued in 2025 and 2026 and registered in Minnesota, the median is 6% of gross sales with a middle half of 5% to 7% (21). The stack has not converged, and the stack is what a lender should model.

Domino's franchisees pay a 5.5% royalty and a 6.0% standard advertising contribution plus a per-order digital fee, a stack of 11.5% before technology (25). Wingstop charges a 6% royalty and a 5.5% national advertising fund, raised from 5.0% in fiscal 2023 "to support digital and technology-related costs" (26). Subway runs 8% plus 4.5%, Papa John's 5% plus a 6% marketing fund plus a 1.75% digital fee, and Little Caesars 6% plus up to 7% advertising (32, 28). McDonald's raised its royalty from 4% to 5% for new restaurants from January 2024, which CNBC, citing an internal memo, described as the first increase in nearly three decades; on a $3.6 million restaurant the point is worth about $36,000 a year (51). In hotels, HVS puts total franchise cost at about 10.4% to 10.8% of rooms revenue on average, with first-class brands near 12.4%; royalties have settled at 5% to 6% of rooms revenue across Hilton, Marriott, IHG, Wyndham and Choice, with program and marketing fees adding 2% to 4% and loyalty assessments charged separately (49).

Outside restaurants and hotels the royalty is often not a percentage of sales at all, and converting it changes the ranking. Winmark's resale brands cost about 4.6% of sales on our calculation. Seasonal tax brands run 19% to 21.5%, and H&R Block takes about 30% of franchisee tax preparation revenue. RE/MAX's fixed per-agent fees work out to about 4.8% of gross commission income in a productive office and above 10% in a weak one. Express Employment's royalty of 40% of gross margin equals about 8.4% of billings (81, 82). A credit analyst comparing a Winmark store to a Liberty Tax office on the headline royalty line is comparing nothing.

Growth in fee load since 2015 has come through add-ons rather than the royalty. Technology fees were charged by 61.9% of franchisors in a 2019 review of 2,191 FDDs, with median annual fees from $1,500 in automotive to $8,616 in lodging (50). Ad fund rates are rising to pay for digital ordering. Supplier economics are the layer almost nobody models. Of 259 FDDs issued in 2025 and 2026, 99.2% require purchases from the franchisor or approved suppliers, 77.2% report franchisor or affiliate revenue from those purchases, and 47.9% report supplier rebates. Where a rebate rate is stated the median range is 1% to 10% of purchases, and required-purchase revenue was a median 8.23% of franchisor total revenue and 25% or more for 27.9% of disclosing franchisors (21). At Domino's the supply chain segment produced $2.99 billion, or 60.5%, of $4.94 billion of fiscal 2025 revenue, against $677.1 million of US royalties and fees (25). The franchisor's largest business is selling to its franchisees.

The regulatory posture is settled for now: regulators target undisclosed fees, not fee levels. The FTC's July 12, 2024 staff guidance declared that imposing fees not disclosed in the FDD may violate Section 5 and the Franchise Rule, passed on a 3-2 vote, and was still posted in October 2026 under a chairman who dissented from it. NASAA's August 2025 guidance requires ranges or formulas in Items 5 and 6 when costs may shift (20). No federal rule caps any fee, and the FTC's 2023 Request for Information, which drew 5,291 comments, has not produced a rule amendment.

The number that should stop a lender is the one that puts fee load next to franchisee profit. Domino's told investors its estimated average US franchisee store profitability in 2025 was about $166,000, roughly 12% of sales, and labeled it an internal estimate from unaudited franchisee self-reports. McDonald's told its September 2026 investor day that US restaurants average north of $4 million in sales with operating cash flow of about $500,000, again roughly 12% (25, 85). Both sit against fee stacks of 11.5% or more. In mainstream quick service the franchisor's take and the franchisee's four-wall profit are approximately the same size.

Item 7 of the FDD is a franchisor-prepared table of pre-opening costs plus an "additional funds" line that must cover at least three months or a reasonable period for the industry (19). In a Minnesota sample of 259 FDDs issued from January 2025 to August 2026, 237, or 91.5%, used exactly three months, and the median additional-funds line was $25,000 to $50,000, about 9.2% of the high estimate. Some 69.5% of the tables assume a leased site, only four include buying land or a building, and 52.5% expressly exclude real estate purchase (21). Real estate and build-out averaged 33.4% of the high estimate across sectors, 47.4% in food and beverage, 50.9% in fitness and 75.5% in lodging, and explained 40% of the gap between low and high totals.

The exclusions sit in the brands lenders see most. Taco Bell's 2026 FDD puts a new traditional unit at $1,859,750 to $4,312,200 excluding land, with building and site construction alone at $1,000,000 to $2,000,000 (22). Tommy's Express excludes purchase or long-term lease costs for real estate and Hampton by Hilton excludes real property. New-build select-service hotel prototypes run from about $13.9 million for a 104-room Holiday Inn Express to $26.6 million for a 107-suite Home2 Suites before land, against an HVS all-in 2026 median of $213,000 per room; change-of-ownership PIPs on upper-midscale flags typically run $10,000 to $35,000 per key (49).

The ranges have also lagged the cost of building. Turner's Building Cost Index averaged 1156 in 2019 and 1485 in 2025, a cumulative 28.5%, and reached 1575 in the third quarter of 2026 (24). McDonald's traditional range moved from $1,366,000 to $2,450,000 in its 2022 FDD to $1,472,000 to $2,807,000 in 2026, up 7.8% at the low end and 14.6% at the high end against a 14.7% rise in the Turner index over the same period (23). Capital-heavy concepts moved faster: Tommy's Express's high end rose 42.7% between its 2020 and 2025 FDDs against a 26.2% rise in the index. Producer prices for nonresidential construction inputs re-accelerated to 11.9% year over year in September 2026, the most in four years, and Section 232 steel and aluminum tariffs doubled to 50% in June 2025.

Understated build-out is now a live legal liability for franchisors, and the record is useful to lenders because it tells them where disclosures have been found wrong. The FTC's $17 million Xponential settlement in March 2026, the largest franchise redress in the agency's history, turned on opening timelines: franchisees typically took more than a year against disclosed three to six months, which undermined the Item 7 basis (38). In July 2026 a federal court in Texas refused to vacate a $700,000 arbitration award against Dickey's Barbecue Restaurants after a franchisee's opening costs overran the FDD and the store closed within about three months (84).

The SBA rule now cuts the other way. SOP 50 10 8, effective June 1, 2025, requires a 10% equity injection for start-ups and complete changes of ownership, measured on "all costs required to become operational," and that definition is broader than Item 7. Seller debt counts toward the injection only on full standby for the life of the loan and only up to half of the requirement (59). On the 504 side the contribution rises to 15% for a new business or a special-purpose property and 20% when both apply, and hotels, car washes and gas stations are on the SOP's special-purpose list (62). The practical rule is the one we apply in every feasibility study: underwrite to the Item 7 high end plus land, site work, a contingency and six or more months of reserves, and treat a three-month additional-funds line as a disclosure convention rather than an operating budget.

The anchor for sizing franchise debt is unit-level profit, and unit-level profit is modest. Franchisor-cited four-wall EBITDA for mainstream quick-service brands clusters between $100,000 and $210,000 a unit. Restaurant Brands International put Burger King franchisee four-wall EBITDA at $185,000 per restaurant in 2025, down from $205,000 in 2023 and 2024 and up from $140,000 in 2022, attributing the 2025 decline to roughly 7% commodity inflation led by beef, which rose more than 20% for the year (42). Domino's estimates about $166,000 per store for 2025, with the average franchisee owning nine stores and enterprise-level profit approaching $1.5 million (25). Wendy's franchisee EBITDA margins fell to 9.3% of sales in 2025 (27).

Franchisee-filed evidence sits below franchisor averages, and the gap is the point. Carrols, when it was the largest Burger King franchisee, earned adjusted restaurant-level EBITDA of 13.2% of sales in 2023 but only 8.0% after corporate overhead, on average sales of $1,744,859 per restaurant (43). NPC International's first-day declaration projected $5.6 million of EBITDA across 1,227 Pizza Huts for 2020 before the pandemic, about $4,600 a unit, down 85% from 2019 (44). Sailormen, a 136-unit Popeyes franchisee, reported $233,458,379 of 2025 sales and a net operating loss of $18,769,243, roughly $1.72 million of sales and a $138,000 loss per unit (45). Meritage Hospitality, a 314-unit Wendy's franchisee, filed Chapter 11 on September 17, 2026 after store-level EBITDA fell 48% in 2025 to $36.2 million and a 2024 net profit of $8 million became a 2025 net loss of $31.5 million (46). A McDonald's National Owners Association survey of more than 100 owner-operators found 95% saw store-level profitability fall in the first quarter of 2026 and nearly eight in ten reported cash flow insufficient to support required reinvestment (86).

Item 19 disclosures that show profit, where they exist, show dispersion rather than an average. Domino's 2025 FDD reports pro forma EBITDA from 1.7% to 14.7% of sales by weekly sales band (25). Planet Fitness discloses EBITDA only for corporate clubs: the bottom third averaged $266,824, or 21% of revenue, the middle third $683,438 and the upper third $1,089,084 in the 2025 FDD, and the bottom third earned only $90,105 in the 2022 edition (37). Great Clips reports salon operating cash flow of 19.77% of sales, but only from the 2,376 of 4,158 salons that submitted financials, before manager and franchisee pay, and states that non-reporting salons would have lowered the median (48). Scooter's 2026 FDD puts kiosk gross sales at $999,869 and EBITDA at 14.6% of net sales against an Item 7 of $1.16 million to $1.35 million that excludes land (75). In urgent care, American Family Care's 2026 FDD reports median franchised cash revenue of $1,699,854, and its affiliate-owned centers below about $1.4 million of collections posted negative four-wall EBITDA. Urban Air's Item 19 averages run from about $2.0 million to $3.2 million on Item 7 investments of $2.1 million to $5.8 million, a capital-to-sales ratio most lenders would not accept in a non-franchised business (88).

Owner income is a different number from unit EBITDA, and it is the one the borrower lives on. Franchise Business Review's survey of more than 38,000 owners found average owner income of $102,910, rising to $142,638 for owners of two to four units and $214,418 for owners of five or more; its 2026 dataset reports an average of $125,240 across 330 brands (47). After royalty, ad fund, debt service, a capital reserve and a market-rate manager, a single mainstream unit often leaves owner earnings in the low five figures. Debt service has become a larger claim on that figure: with the prime rate at 7.00% since September 17, 2026, the SBA 7(a) maximum variable rate for loans above $350,000 is 10.00%, and a $390,000 ten-year loan costs about $61,800 a year (59).

Scale raises owner income and does not protect against leverage. Every one of the largest franchisee bankruptcies between 2019 and 2026 was a 47-to-1,620-unit operator. Scale spreads general and administrative cost, as Carrols' 5.6% of sales showed, and it amplifies brand-level sales declines, remodel mandates and the securitized or syndicated debt that financed the growth. Distressed units clear near one year of EBITDA: Burger King paid $4.7 million for 32 Meridian restaurants at a 2023 bankruptcy auction, Pizza Hut paid $720,000 for 18 EYM units, or $40,000 each, a bankruptcy judge approved the sale of Sailormen's 97 Popeyes to five buyers for $16.55 million, and 42 Meritage Wendy's units were proposed for sale at $18.6 million, about $443,000 per unit (45, 46). Those prices, not the 6.6x EBITDA that RBI paid for Carrols, are the recovery values a lender should carry for a franchised restaurant portfolio in default.

Labour is the largest and most durable shock. Nineteen states raised their minimum wage on January 1, 2026; Washington reached $17.13, Connecticut $16.94, California $16.90 and New York City $17.00 while the federal floor stayed at $7.25 (70). California's $20 fast food wage, in force since April 1, 2024 for chains with 60 or more locations, was a 25% step for covered workers and has not been raised since. The research on its effect does not agree on a single employment number, and the quality of the studies matters more than the count. Clemens, Edwards and Meer estimate a relative fast food employment decline of 2.7% to 3.9%; Reich and Sosinskiy at Berkeley find no job loss; Dube's elasticities straddle zero. The newest and best-identified work, by Melo, Neumark, Sigaud and Wagner in September 2026, finds statistically insignificant state-level effects but chain-level elasticities of -0.91 to -1.05 for broader chain groups, together with slower entry and higher exit, which places the damage in smaller chains rather than in the market as a whole (70). Prices rose 1.5% to 3.6% relative to control markets depending on the study, and staffing hours fell 8% to 12% at continuing establishments. For an underwriter the conclusion is to carry labour at 30% to 35% of sales in quick service, stress traffic rather than price, and treat a borrower's position in a small chain in a high-wage state as a specific risk.

Construction and occupancy are the second shock and the most underestimated. The Turner index is up 28.5% from 2019 to 2025 and 5.49% year over year in the third quarter of 2026 (24). Net lease pricing now penalizes franchisee credit directly: the Boulder Group's third-quarter 2026 report puts franchisee quick-service asking cap rates at 6.87% against 5.90% for corporate-guaranteed leases, a 97 basis point gap that was 40 points in 2021 and 30 in 2015, and against 4.50% for McDonald's and Chick-fil-A ground leases (64). The overall single-tenant cap rate of 6.92% is the highest in more than a decade. A franchisee-signed sale-leaseback therefore carries more rent per dollar of building than it did five years ago. Public net lease REITs that finance franchisees report unit-level rent coverage of 2.5x at Getty Realty, 3.5x to 3.6x at Essential Properties and 5.1x at Four Corners, and NNN REIT cites a historical average rent recovery of about 70% of prior rent on re-leased vacant properties (65). Restaurant rent of 8% to 10% of sales is common; a 10% cost overrun combined with a 50 basis point exit stress erases the 100 to 200 basis point spread that makes a build-to-suit work.

Pricing power is the third shock, and it is now reversing. CPI food away from home rose 6.0%, 8.3%, 5.2%, 3.6% and 4.1% in the five December-to-December years from 2021 to 2025, about 30% compounded, against 2.7% for all items in 2025 (71). By late 2025 McDonald's was covering about half of the menu price cut on its $5 and $8 value meals, spending roughly $15 million in September and about $75 million in the fourth quarter, after traffic from lower-income customers fell nearly double digits (72). Chipotle's restaurant-level margin fell from 26.7% to 25.4% in 2025 and Jack in the Box's company payroll rose to 33.8% of sales from 31.5% (70).

The fourth shock is a collection of smaller fees that do not reverse. Average debit interchange was 0.73% of transaction value in 2024, the Illinois interchange law was enjoined, and Uber Eats raised its lowest-tier commission from 15% to 20% in March 2026. Domino's attributed a 2.4 point fall in company-store gross margin to insurance, labour rates and food basket pricing even as same-store sales rose 3.0% (25). In Medicaid-exposed home care, the CMS rule requiring 80% of payments to reach direct-care compensation takes effect July 9, 2030 and will reset the margin structure of a sector that currently shows some of the best franchise SBA performance (87).

The fifth shock went the other way. Joint-employer exposure, which franchisors spent a decade fighting, has fallen. The NLRB's 2023 rule was vacated in March 2024 and formally withdrawn on February 27, 2026, restoring the 2020 standard of substantial direct and immediate control. A Department of Labor proposal of April 2026 would treat reserved and indirect control as relevant under wage and hour law, so the question is open again, but at the federal level franchisors in 2026 are freer than at any point since 2015 (70).

Large American franchisors finance themselves by pledging their royalty streams. Whole-business securitization issuance was $13.5 billion in 2024 and $11.0 billion in 2025, up from about $2.3 billion in 2023, with about $36 billion outstanding at the end of 2024, the second-largest non-consumer asset-backed sector after equipment (52). Subway sold $3.35 billion of notes in May 2024, the largest such deal on record, with orders above $19 billion, and a further $2.34 billion that September. New issues cluster at BBB. KBRA expects issuance to fall in 2026 as refinancing activity slows (89).

The structure places the franchisor's operating company in a subordinate position to its own royalties. Management fees paid from the securitization to run the brand are fixed, and when they fall short of the actual cost of running it, the franchisor lives on its sales revenue and on whatever cash it can find. FAT Brands is the defining case. It filed Chapter 11 on January 26, 2026 with about $1.4 billion of securitized notes issued by five special-purpose financing subsidiaries, $2.1 million of unrestricted cash, and, in its chief restructuring officer's words, "$72 million in penalty interest and penalty amortization since the end of 2022" after missing anticipated call dates. Its securitization management fees were about $1.5 million a month against corporate costs of about $8 million a month, and it used $8.6 million of unspent advertising fund cash for liquidity. In May 2026 the court approved a $595 million credit bid by a lender vehicle for 13 concepts with more than 1,700 restaurants and a $359.5 million credit bid for Twin Peaks; Smokey Bones shut down (53). Hooters filed with about $376 million of debt, most of it from a 2021 securitization, and sold its company stores to a franchisee group (54). TGI Fridays filed in November 2024 after its securitization trustee terminated it as manager over a $2 million management fee overpayment; Fridays is now entirely franchised (55).

In each case the franchised units kept operating. What the franchisees bore was gift card liability, marketing fund exposure, interrupted support and the uncertainty of a brand whose owner was its own noteholders. A lender to a franchisee of a securitized system should read the rating agency's surveillance releases, which are free and disclose system size, franchise mix and revenue mix, and should read Item 21 of the FDD for going-concern language and negative equity. Seven states, including California, New York, Illinois, Minnesota and Virginia, have codified authority to impose fee deferral, escrow or surety bonds on a franchisor that has not demonstrated adequate financial arrangements, and a state addendum imposing one of those conditions is a published credit opinion on the franchisor (53).

Private equity ownership is the other balance-sheet fact. A 2025 working paper by Atz, Eliason, Norlander, Pinto and Steinbaum finds that adopting franchisee restraints raises the probability of private equity ownership within five years by 2 to 5 percentage points, and that greater franchisor control correlates with higher initial fees (69). The direction of the causality is debatable; the correlation is not.

Brokers and outsourced sales organizations are paid mainly from the initial franchise fee, typically about half of it, which can range from $10,000 to more than $100,000 (57). A 2024 survey of 120 brands found 44% relying on brokers, who absorbed about 29% of recruitment budgets and produced about 13% of leads. The channel is lightly regulated: only Washington and New York register franchise brokers, California's 2024 broker law is enacted but unfunded and not operating, and NASAA's model act, adopted May 4, 2026, has not been enacted by any state.

The enforcement record is the best outcome evidence there is. Burgerim collected $57.7 million in franchise fees from 2015 to July 2019 and refunded $9.2 million; California regulators found it sold at least 1,550 franchises and opened about 130 of them (58). Xponential's disclosed opening times of three to six months compared with an actual average of about 13.3 months from signing, according to the New York Attorney General, and the company recognized $19.9 million of revenue from franchise agreement terminations in fiscal 2025, up 62% and equal to 57% of its territory fee revenue (38). Initial and territory fees were 26.8% of royalties at Xponential in fiscal 2025, against 2.9% at Dine Brands and 2.2% at Wingstop. A franchisor whose revenue depends on selling licenses behaves differently from one whose revenue depends on open units paying royalties, and the ratio is in every 10-K.

The underwriting test is the backlog. Item 20's fifth table reports units signed but not open. Xponential reported 2,606 open North American studios and 832 contractually committed but unopened at December 31, 2025, a 32% backlog ratio, with about 30% of obligated licenses more than twelve months behind schedule and inactive. A vendor dataset counts 8,379 sold-but-not-opened units entering 2026, equal to 3.8% of the active system at enterprise brands and 13.3% at small and mid-sized brands (38). Where a borrower's brand shows a backlog above a fifth of its open base, the borrower is competing for the franchisor's attention with hundreds of unopened licenses, and in some systems with a sales team whose next commission depends on signing the borrower's future neighbor.

Franchise eligibility for SBA financing is a Directory test again. The SBA Franchise Directory took effect January 1, 2018, was eliminated by final rule effective May 11, 2023, and was reinstated by SOP 50 10 8 for loans approved on or after June 1, 2025 (60). Any brand that meets the FTC franchise definition must be on the Directory to obtain SBA financing, and lenders rely on the listing rather than reviewing franchise documents. Brands listed as of May 2023 had until June 30, 2026, after three extensions, to execute the new franchisor certification; those that did not were removed. SBA does not publish a brand count, but the posted Directory file shrank from 680 KB in February 2026 to 283 KB in October 2026, which is consistent with removals even if it does not measure them (60). Control-based affiliation is gone; affiliation now turns on ownership thresholds. Master franchise arrangements and franchisees whose management company is affiliated with the franchisor remain ineligible (59).

Underwriting now decides most franchise deals. SOP 50 10 8 requires a 10% injection for start-ups and complete changes of ownership, with seller notes counting only on full standby and for no more than half. SOP 50 10 8.1, issued in August 2026, superseded in September and effective October 1, 2026, adds in Appendix 15 that initial acquisitions and owner buyouts must show 1.25x debt service coverage on historical earnings, while business expansions stay at 1.15x, and that a Quality of Earnings report is required when the business purchase price excluding real estate is $3 million or more (59). For a franchise resale, those rules combine with the franchisor's own transfer package: a transfer fee, a right of first refusal, a new agreement on current terms and a remodel obligation, all of which belong in the sources and uses before any price is agreed.

The structural change of 2026 is the combination rule. SBA Policy Notice 5000-879058, dated May 18, 2026 and effective July 4, provides that a lender may first approve a 7(a) loan followed by a 504 transaction approved second, and that the borrower's outstanding 7(a) balance does not reduce the maximum 504 loan available. The cumulative limit rose from $5 million to $10 million. The $3.75 million ceiling on total SBA-guaranteed exposure to one borrower did not move (61). For a ground-up hotel, car wash or drive-thru restaurant, the practical result is a 504 first mortgage on the real estate with a 7(a) behind it for equipment, franchise fees, working capital and the pieces of Item 7 that the debenture cannot touch. Debenture pricing, which averaged about 6.27% in fiscal 2025 and 6.00% in fiscal 2026 with a low of 5.722% in March 2026, printed 6.974% on October 8, 2026, the highest in the series we reviewed (74).

Who lends is also concentrated. In the FOIA franchise field for fiscal 2010 to 2026, Huntington National Bank financed 10,685 franchise loans, Wells Fargo 3,193, Live Oak 2,280 and Celtic 2,074, and FRANdata states that more than 60% of SBA franchise loans are made by banks that use its brand scores (16, 17). Franchise-flagged 7(a) approvals ran 7,363 in fiscal 2023, 5,904 in fiscal 2024 and 7,135 in fiscal 2025 on our count, with a fiscal 2024 average of about $722,652; The UPS Store led by count with 514 loans across fiscal 2023 to 2025 at a median of $345,000, and economy and midscale hotel flags led by dollars (15, 16).

USDA is the other federal channel, and it is the only one with a hard feasibility trigger. Under 7 CFR 5001.306(a)(3)(i), any Business and Industry guaranteed loan above $1,000,000 to a new business requires an independent feasibility study prepared by a qualified consultant acceptable to the agency, and "new business" includes a new unit opened by an existing franchisee in a new market (63). Fiscal 2026 terms are an 85% guarantee below $5 million and 80% from $5 million to $25 million, with a 3.0% upfront fee and a 0.55% annual retention fee; equity is 10% for existing businesses and 20% to 25% for new ones. Branded hotels dominate the franchised use of the program, with awards from $2.7 million to $20 million for Hampton, Courtyard, Fairfield, Holiday Inn Express and Comfort projects in USDA's own charts. SBA, by contrast, has no mandate: 13 CFR 120.160(b) says SBA "may require" a feasibility study, and no SOP sentence requires one for any asset class (62). In practice, for a start-up or a special-purpose property, lenders require one anyway.

The franchisor's approval of a site transfers no market risk to the franchisor, and the franchise agreement says so. Papa John's standard agreement states that approval "does not constitute an assurance, representation or warranty of any kind, expressed or implied, as to (i) the suitability of the Location ... (ii) the successful operation of the Restaurant" (66). Equivalent language appears across the industry. Site approval is a brand-standards check: visibility, access, traffic count, co-tenancy and the franchisor's own development map. It is not a demand study, and the franchisor is not liable if demand is absent.

Territorial protection has largely disappeared. A text analysis of 33,629 FDDs covering 4,371 chains between 2009 and 2023 finds exclusive territories fell from a majority of chains at the start of the period to around 20% by its end, while franchisor reservation of the right to compete through other channels and nearby units reached almost complete prevalence (69). In the 1990s, 60% to 80% of franchisors granted some form of territory. The franchisee of 2026 is, in most systems, protected from its own brand only by the franchisor's commercial judgment about cannibalization.

That judgment is measurable, and it is not always exercised in the franchisee's favor. Kalnins' study of 1,315 chain hotels in Texas found that same-brand franchised entry cannibalized incumbent revenue by an average of $7,360 per quarter for a 110-room hotel, while same-brand company-owned entry was associated with higher incumbent revenue; the franchisor, in other words, placed its own units more carefully than its franchisees' (67). In fast food, Pancras, Sriram and Kumar find that 86.7% of an average unit's sales are incremental to the system and 13.3% are taken from sister stores, with cannibalization falling 28.1% per additional mile and reaching zero at about ten miles (68). Published site thresholds cluster at 15,000 to 30,000 vehicles a day: Culver's sets a 15,000 minimum and 30,000 preferred, Checkers and Wawa require 25,000, Wendy's and Tim Hortons cite 20,000 or more, and Twin Peaks seeks 30,000. Those are brand-standards screens. They say nothing about the number of competing units already drawing from the same trade area, the demographic trajectory of the ring, or the price point the market will bear.

The disputes that follow a failed site are almost never pleaded as negligent site approval. In the court records we reviewed, failed-unit cases are brought as misrepresentation, Item 19 or encroachment claims, and courts have rarely rescued franchisees without an express territory (67). The lender is left with the collateral. What an independent feasibility study tests that franchisor approval does not is the demand side: trade area definition from drive times rather than radii, supply including the franchisor's own pipeline and signed-but-unopened units, capture rates against observed competitor volumes, a cost basis built from Item 7's high end plus everything Item 7 excludes, and a debt service coverage test on the bottom cohort of the brand's Item 19, not its average. Those are the variables that distinguish a Planet Fitness loan from an iLoveKickboxing loan in the SBA file, and no part of the franchisor's approval letter speaks to any of them.

The industry forecast for 2026 is 845,000 establishments, 8.9 million jobs and $921.4 billion of output (1). Our base case is unit growth of about 1.5% a year through 2030, which puts the United States at roughly 880,000 to 915,000 franchise establishments by the end of the decade. The composition will shift. Quick service, at about 281,000 establishments and $318.6 billion of output, is forecast to grow 0.4% to 0.5% in 2026 and is the stalled segment; child services and commercial and residential services lead at 3.2% (1). Hotels will grow internationally and hold flat domestically. Fitness will keep splitting between high-volume, low-price boxes and a boutique segment that is still shedding units. Home services, quick lube and resale retail will take a larger share of SBA franchise originations because they combine low Item 7 ranges with the best seasoned loss history in the file.

Three drivers decide whether the base case holds. The first is credit. Prime at 7.00% and a 7(a) ceiling of 10.00% put debt service at a level where a single mainstream quick-service unit cannot carry a full Item 7 of SBA debt from four-wall EBITDA of $166,000 to $185,000, and the combination rule will push real-estate-heavy franchise projects toward the 504 debenture, where loss severity has been a fraction of 7(a). The second is labour, where the state wage floors of 2026 have been absorbed mainly through hours and prices, and where the damage, on the best current evidence, concentrates in smaller chains. The third is the franchisor's own program of closures. Wendy's, Papa John's and Pizza Hut have told the market how many units they intend to lose; a borrower in the bottom quartile of any of those systems is holding a loan whose exit the franchisor has already scheduled.

The regulatory backdrop has eased for franchisors and tightened for disclosure. The joint-employer standard is back at its 2020 form, the FTC has proposed no Franchise Rule amendment, and the agency's enforcement energy has gone instead into disclosure accuracy, with the Xponential and Burgerim cases as the markers. For lenders that is a favorable combination: the documents are getting more honest, and the brands that sold ahead of their ability to open are being named.

What has not changed is the absence of a brand-level public record. GAO, the Inspector General, two Senate bills and the FTC have all pointed to the same gap. The SBA loan file, the state FDD registries and the franchisors' own 10-Ks contain the answer, and nobody has joined them at the brand and vintage level with a published method. The MMCG Franchise Brand Index is our attempt to do that, and the sector reports that follow this piece apply it one industry at a time.

Do franchises fail less often than independent businesses?

Slightly, and only at the start. Census microdata show franchised start-ups surviving their first year at a rate about 5 to 6 percentage points higher than independents after controls, and no survival or growth difference once a business has survived a year or two. Earlier cohorts showed franchisees surviving less often. The "95% success" figure traces to franchisor self-reported surveys from 1968 to 1992 and has no independent basis.

What is the SBA default rate for franchise loans?

It depends on the period and the definition. GAO found that SBA paid guarantees on about 28% of franchise 7(a) loans made from fiscal 2003 to 2012. The FTC found a 3.9% default rate on 66,291 franchise loans originated 2013 to 2023 against 3.5% for comparable non-franchise loans. MMCG's computation on resolved fiscal 2010 to 2019 loans shows franchise borrowers charged off at 9.4% against 7.1% for non-franchise borrowers. The brand spread, from zero to above 28%, is far wider than any of those averages.

Which franchise sectors have the best and worst SBA loss history?

On resolved fiscal 2010 to 2019 7(a) loans, franchised childcare charged off 2.6% and hotels under NAICS 721110 show a cumulative rate near 1.8% since 1995. Franchised restaurants charged off 11.4%, fitness 11.6% and auto repair 11.7%. Inside each sector, brand dispersion is the dominant variable.

How much does a franchise really cost in fees?

The median royalty in 2025 and 2026 FDDs is 6% of sales, but royalty plus advertising stacks reach 11.5% at Domino's and Wingstop and 12.5% at Subway, hotel franchise costs run about 10.4% to 12.4% of rooms revenue, and tax preparation brands take 19% to 30% of franchisee revenue. Supplier markups and rebates, which 77.2% of franchisors report receiving, sit on top of the stated fees.

Does Item 7 tell a lender the full project cost?

No. Item 7 is a franchisor-prepared estimate that in 91.5% of recent FDDs assumes three months of additional funds, in 69.5% assumes a leased site, and in 52.5% expressly excludes real estate purchase. Real estate and build-out average a third of the high estimate and three-quarters in lodging. SBA's 10% equity injection is measured on all costs required to become operational, a broader base than Item 7.

Does SBA require a feasibility study for a franchise loan?

No rule mandates one. 13 CFR 120.160(b) says SBA may require a feasibility study, and no SOP sentence requires one for any asset class. USDA Business and Industry does: any guaranteed loan above $1,000,000 to a new business requires an independent study under 7 CFR 5001.306(a)(3)(i). In practice, lenders require a study for start-up and special-purpose franchise projects under both programs.

What changed for franchise lending on October 1, 2026?

SOP 50 10 8.1 took effect. Appendix 15 requires 1.25x debt service coverage on historical earnings for initial acquisitions and owner buyouts, keeps 1.15x for business expansions, and requires a Quality of Earnings report when the business purchase price excluding real estate is $3 million or more. The Franchise Directory requirement, the 10% equity injection and the 504 special-purpose rules carried over unchanged from SOP 50 10 8.

What is the MMCG Franchise Brand Index?

A brand-level dataset that joins seasoned SBA 7(a) charge-off rates from the public loan file, computed by vintage with sample sizes disclosed, to each brand's Item 20 unit flows and fee terms from filed FDDs. It is refreshed annually against the quarterly FOIA release, published with its method, and downloadable.