GLOSSARY
Exit quality ratio
The exit quality ratio measures distressed exits (terminations plus “ceased operations”) as a share of all outlet exits.
Not all franchisee exits are equal. A transfer — one operator selling to another — keeps the unit open. A termination or a unit that ceases operations does not. The exit quality ratio isolates the bad exits from the total, surfacing rot that healthy-looking transfer volume can hide.
It is the signature metric of the Watch Desk Health Index, weighted at 25%.
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