INDUSTRY BENCHMARK · 186 SYSTEMS · FISCAL 2023–2026
Are food & dining franchises a good investment?
Across 157 food & dining franchise systems, the median system's exit rate in its latest fiscal year was 3.8%, and its opening rate 8.3%. Pooled across systems, with no system counting for more than 20% of the weight, the exit rate was 7.1%. Median franchise fee: $35K; median royalty: 5.5%; median total investment: $375K–$957K.
There is no official “food & dining franchise failure rate.” What franchisors must disclose, in the Item 20 outlet tables of the FDD, is how many franchised outlets were terminated, not renewed, or “ceased operations — other reasons” each year. The exit rate here is that count divided by franchised outlets open at the start of a single fiscal year. It counts exits for any reason (some are retirements, sales, relocations or non-renewals) and misses struggling units that were sold as transfers.
3.8%
157 systems · latest fiscal year each
7.1%
raw totals: 5,776 exits / 82,652 at start
8.3%
6,761 outlets opened in total
186
FDD filed within 24 months
82,090
at latest fiscal year end
$35K
FDD Item 5
5.5%
FDD Item 6
$375K–$957K
FDD Item 7
127/186
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 186 SYSTEMS · 186 FILINGS · FISCAL 2023–2026
| Signal | Brand | Verdict |
|---|---|---|
| STRONGEST RECORD | Wingstop | Strong |
| STRONGEST RECORD | PLAYA BOWLS | Strong |
| STRONGEST RECORD | EINSTEIN BROS. RESTAURANT | Strong |
| WEAKEST FILED RECORD | TGI FRIDAYS | Weaker |
| WEAKEST FILED RECORD | BAMBU | Weaker |
| WEAKEST FILED RECORD | TCBY | Weaker |
VERDICTS FROM EACH BRAND'S OWN FDD ITEM 20 FILING · METHODOLOGY
Food & Dining franchise questions, answered from the filings
How many food & dining franchised outlets leave their systems each year?
There is no official failure rate. FDD Item 20 tables report how many franchised outlets were terminated, not renewed, or "ceased operations — other reasons" each year. Across 157 food & dining systems, the median system's exit rate in its latest fiscal year (fiscal 2023–2026) was 3.8%; pooled across systems, with no system counting for more than 20% of the weight, it was 7.1%. Not every exit is a failure: some are retirements or sales.
How much does a food & dining franchise cost?
Across the latest FDD filings of 186 food & dining systems, the median initial franchise fee is $35K (Item 5) and the median total investment range is $375K–$957K (Item 7).
What royalty do food & dining franchises charge?
The median ongoing royalty across 186 food & dining franchise systems is 5.5% of gross sales, per Item 6 of their latest FDD filings.
Are food & dining franchises growing or shrinking?
In each system's latest Item 20 fiscal year (fiscal 2023–2026), the median food & dining system opened new franchised outlets at 8.3% of its starting base and lost 3.8% to exits. For the median system, openings outpaced exits.
What is the healthiest food & dining franchise?
Of the food & dining systems rated from their FDD Item 20 tables, Wingstop has the strongest record (verdict: Strong). A verdict describes the filed record, not a recommendation to buy.
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 the numbers, including talking you out of a bad deal.