GLOSSARY

Exit rate

The exit rate is the share of a brand's franchised outlets that left the system in a year — through termination, non-renewal, ceasing operations, or being bought back.

Every year some outlets leave a franchise system. The exit rate puts that churn in proportion to system size, so a brand losing 30 of 3,000 units reads differently from one losing 30 of 150.

Pair it with exit quality: transfers (one owner selling to another) keep units alive, while terminations and ceased operations usually mean a failed investment. Both come straight from FDD Item 20.