INDUSTRY BENCHMARK · 15 SYSTEMS · FISCAL 2023–2025
Are recreation & entertainment franchises a good investment?
Across 15 recreation & entertainment franchise systems (572 franchised units), franchisees exited at an annualized rate of 5.5% in their latest FDD Item 20 filings, while new outlets opened at 11.4%. The median buy-in: a $45K franchise fee, 6.0% royalty, and a total investment of $1.2M–$1.8M.
People search for a “recreation & entertainment franchise failure rate,” but no such official number exists. 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. That annualized exit rate is the honest, measurable proxy: it slightly overstates failure (some exits are retirements or sales) and slightly understates distress (struggling units often sell before they close), but unlike survey numbers it comes from legally mandated disclosures.
5.5%
30 exits / 542 units at start
11.4%
62 outlets opened
15
verified FDD extractions
572
at latest fiscal year end
$45K
FDD Item 5
6.0%
FDD Item 6
$1.2M–$1.8M
FDD Item 7
12/15
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 15 SYSTEMS · 15 FILINGS · FISCAL 2023–2025
| Signal | Brand | Index | Grade |
|---|---|---|---|
| STRONGEST | Play Street Museum | Proven & strong | |
| STRONGEST | URBAN AIR ADVENTURE PARK | Proven & strong | |
| STRONGEST | Camp Jellystone | Proven & steady | |
| WEAKEST | VALHALLAN | Too new to judge | |
| WEAKEST | Big Air Trampoline Park | Too new to judge | |
| WEAKEST | Golf Envy | Too new to judge |
HEALTH INDEX: SOURCED 0–100 SCORE FROM EACH BRAND'S OWN FDD ITEM 20 · METHODOLOGY
Recreation & Entertainment franchise questions, answered from the filings
What percentage of recreation & entertainment franchises fail?
There is no official failure rate, but FDD Item 20 filings show the honest proxy: across 15 recreation & entertainment franchise systems, 30 franchised outlets left their systems (terminations, non-renewals, and "ceased operations — other") out of 542 open at the start of the year — an annualized exit rate of 5.5% in fiscal 2023–2025. Not every exit is a failure (some are retirements or sales), but it is the measurable floor.
How much does a recreation & entertainment franchise cost?
Across the latest FDD filings of 15 recreation & entertainment systems, the median initial franchise fee is $45K (Item 5) and the median total investment range is $1.2M–$1.8M (Item 7).
What royalty do recreation & entertainment franchises charge?
The median ongoing royalty across 15 recreation & entertainment franchise systems is 6.0% of gross sales, per Item 6 of their latest FDD filings.
Are recreation & entertainment franchises growing or shrinking?
In the latest Item 20 filings, recreation & entertainment systems opened new franchised outlets at an annualized rate of 11.4% while franchisees exited at 5.5%. Openings currently outpace exits in this industry.
What is the healthiest recreation & entertainment franchise?
By the Watch Desk verdict system (computed from FDD Item 20 with an evidence gate), the strongest verified recreation & entertainment system tracked is Play Street Museum.
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