From the filed FDD — automated extraction, check the source
2026 FDD
SBA-eligible · directory code S0067 since 2017
Ace Hardware
Hardware stores · parent company: not identified
Ace Hardware is a retailer-owned hardware cooperative whose stores sell tools, paint, lawn and garden supplies, and home-maintenance products. An owner operates a neighborhood hardware store, buying through the cooperative's distribution network and serving homeowners and local contractors.
Ace Hardware net unit count grew 5.1% over 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Too little disclosed history
The earliest Item 20 year we extracted starts at 0 franchised units and the latest shows 4,982 — the extracted record is too short or incomplete to rate, so we don't. The fiscal 2025 exit rate was 1.5%, below the 6.5% median across 23 comparable systems (retail & products). For context, SBA loans to its franchisees approved FY1991–2020 charged off at a rate not clearly different from franchise loans of the same years (86 vs about 107 expected, 0.8×). Judge the disclosures, not a verdict.
Exit rate · fiscal 2025
1.5%
vs 6.5% median across 23 comparable systems (retail & products)
Cost to open
$612K–$2.0M
Item 7 total investment range
SBA loan losses · vs same-year loans
0.8×
86 of 671 charged off vs ~107 expected
Email me when this brand’s record changes
A weekly check for new filings, changes to disclosed costs or earnings, SBA loan totals, and verified public-record events. Only changes to these 1 selected brand. No email when nothing changes. Coverage depends on when source data reaches our database.
Unsubscribe in any alert. We never sell your email.
Data as of 2026-10-29. Figures come from Ace Hardware's public FDD filings (latest: SD 2026, extracted 2026-07-31) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
What each source says
FDD record · SBA loans · model · auditor
The Item 20 record is too short or too small to rate; the loan record and model are context, not a verdict.
FDD record · Item 20
Too little history
Units grew 5% (2023–2025: 4,994 → 5,250); exit rate 1.5% (fiscal 2025) vs 6.5% median.
SBA loans · vs same-year loans
About as expected (0.8×)
86 charge-offs among 671 resolved loans approved FY1991–2020; about 107 expected.
Modeled risk
Lower risk
Directional only — too few seasoned loans to check it.
Auditor opinion · Item 21
Not extracted
We did not extract the audit opinion.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness · shown, not counted in the verdict
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 71 of 4,885 franchised outlets left the system — an exit rate of 1.5% (fiscal 2025), vs a 6.5% median across 23 comparable systems (retail & products). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Outlets at start | 1 | 1 | 1 | 4,867 | 4,994 | 5,144 |
| Opened | 0 | 0 | 0 | 190 | 210 | 173 |
| Transfers | 0 | 0 | 0 | 105 | 112 | 105 |
| Terminations | 0 | 0 | 0 | 75 | 65 | 71 |
| Non-renewals | 0 | 0 | 0 | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 0 | 1 | 19 | 5 |
| Ceased — other reasons | 0 | 0 | 0 | 0 | 0 | 0 |
| Outlets at end | 1 | 1 | 1 | 4,994 | 5,144 | 5,250 |
| Net change | 0 | 0 | 0 | +127 | +150 | +106 |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 1,216 SBA-backed loans to Ace Hardware franchisees since 1991. Of the 671 approved FY1991–2020 that have resolved, 86 charged off — where about 107 would be expected for franchise loans made in the same years. That is 0.8× the expected rate: these loans defaulted at a rate not clearly different from comparable franchise loans.
All-time, 86 of 706 resolved loans charged off (12.2%). That raw figure mixes every approval year since 1991 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score. 42% of the brand's loans have not resolved yet.
0.8×
86 of 671 resolved (FY1991–2020) vs ~107 expected
12.2%
86 of 706 resolved, every approval year
55.7%
charged-off $ ÷ approved $, defaulted loans
$1,040,566
what recent franchisees borrowed
76 mo
approval → charge-off, defaulted loans
89 vs 71
distinct banks still lending
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO ACE HARDWARE BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
The owner's side of the deal
FDD × federal loan record
Who finances it
Wells Fargo Bank National Association
15.2% of this brand's loans
That lender charges off 15.4% of its resolved SBA loans to other franchise brands in the FOIA file, vs 14.8% nationally — a read on that lender's portfolio mix, not a finding about the bank.
Who buys it
64.5%
borrowers with no other franchise SBA loan on record
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).
Does experience help here?
−8.1pp
multi-unit vs single-unit owners
Owners of multiple units default at 6.5%; single-unit owners at 14.6% (each on 15+ resolved loans, owners identified by borrower-name matching).
Computed from 1,216 SBA 7(a)/504 loans matched to Ace Hardware by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $10,000 franchise fee (Item 5) and a total investment of $612K–$2.0M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$612K–$2.0M
all-in investment range
Franchise fee (Item 5)
$10,000
upfront, one-time
Royalty (Item 6)
See Item 6
not a single flat % — read the fee table
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on cost of goods, labor, rent, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for Ace Hardware with a buyer-paid CPAHow the earnings claim is built
FDD ITEM 19 · BASIS · 2026 FDD
This filing makes an Item 19 earnings claim; we have not yet read how it is built. Open Item 19 and check which units it covers, which it leaves out, and whether it shows costs.
Show the basis ↓Hide the evidence ↑
Labor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 50 wage cases against operators of this system, recovering $136K in back wages for 188 workers, including 14 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
50
Back wages owed
$136K
Employees affected
188
Since 2020
6
14 of these cases involved child-labor violations, covering 45 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual Ace Hardware franchisees — separately owned businesses operating under the brand name — not Ace Hardware itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2023.
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
The model puts this brand in its lower-risk band — but this brand has too few seasoned SBA loans to check the score against, so read it as a band, not a number.
Observed · vs same-year loans
0.8×
86 of 671 seasoned loans charged off
Risk percentile
Lower risk
Directional · no point estimate
Modeled · vs same-year loans
band only
too few seasoned loans to check
Top drivers: System size (log units) (lowers) · Share financed by high-loss lenders (lowers) · Item 20 exit rate (lowers) · Investment ceiling (log) (lowers). Too few seasoned SBA loans to check the score — read it as a band. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for Ace Hardware. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
9 questions to ask an Ace Hardware franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what Ace Hardware has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
Ace Hardware’s own Item 20 shows 71 of 4,885 franchised outlets left the system in fiscal 2025 — about 1.5%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
105 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2025
- 03
SBA loans to Ace Hardware franchisees approved 1991–2020 defaulted at a rate not clearly different from franchise loans made in the same years: 86 charge-offs among 671 resolved loans, where about 107 would be expected (0.8×). Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of how these loans ended, from public federal records matched by SBA franchise code — independent of anything the franchisor discloses — compared with franchise loans made in the same years. A charge-off is a loan outcome, not proof the business closed.
SBA 7(a)/504 loan record, seasoned loans FY1991–FY2020 · 0.8× of same-vintage franchise loans
- 04
Item 7 says the low end to open is $612K; the average recent SBA loan to Ace Hardware franchisees was $1.0M. What did you actually spend to open, all in — and did your loan cover anything beyond the build-out?
Lenders size loans to the project they finance. If owners say they spent near the loan figure rather than the Item 7 floor, budget from what they spent.
FDD Item 7 vs SBA approvals FY2020+
- 05
Ace Hardware makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 06
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 07
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 08
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 09
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if Ace Hardware’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing Ace Hardware’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
Ace Hardware franchise questions, answered from the filings
How many Ace Hardware franchised outlets left the system last year?
In Ace Hardware's latest FDD Item 20 (fiscal 2025), 71 of 4,885 franchised outlets left the system — an exit rate of 1.5% — compared with a 6.5% median across 23 comparable systems (retail & products) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a Ace Hardware franchise cost?
Per Ace Hardware's 2026 FDD, buying in requires an initial franchise fee of $10,000 (Item 5) and a total initial investment of $612K–$2.0M (Item 7).
Does Ace Hardware disclose earnings (Item 19)?
Yes — Ace Hardware makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for Ace Hardware franchises default?
SBA loans to Ace Hardware franchisees approved 1991–2020 defaulted at a rate not clearly different from franchise loans made in the same years: 86 charge-offs among 671 resolved loans, where about 107 would be expected (0.8×). All-time, 86 of 706 resolved loans since 1991 charged off (12.2%); that raw figure mixes every approval year, so we compare with same-year loans instead. A charge-off is a loan loss, not proof the business closed. Source: public SBA 7(a)/504 FOIA data.