INDUSTRY BENCHMARK · 28 SYSTEMS · FISCAL 2023–2025
Are retail & products franchises a good investment?
Across 26 retail & products franchise systems, the median system's exit rate in its latest fiscal year was 6.3%, and its opening rate 7.3%. Pooled across systems, with no system counting for more than 20% of the weight, the exit rate was 10.7%. Ace Hardware alone is 64% of the sector's franchised base. Median franchise fee: $40K; median royalty: 6.0%; median total investment: $176K–$388K.
There is no official “retail & products 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.
6.3%
26 systems · latest fiscal year each
10.7%
Ace Hardware alone is 64% of the sector's franchised base.
7.3%
589 outlets opened in total
28
FDD filed within 24 months
7,756
at latest fiscal year end
$40K
FDD Item 5
6.0%
FDD Item 6
$176K–$388K
FDD Item 7
18/28
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 28 SYSTEMS · 28 FILINGS · FISCAL 2023–2025
| Signal | Brand | Verdict |
|---|---|---|
| STRONGEST RECORD | Fleet Feet | Strong |
| STRONGEST RECORD | iFixandRepair | Strong |
| STRONGEST RECORD | Metal Supermarkets | Steady |
| WEAKEST FILED RECORD | Buddy's Home Furnishings | Weaker |
| WEAKEST FILED RECORD | Cartridge World | Weaker |
| WEAKEST FILED RECORD | Bella Bridesmaids | Weaker |
VERDICTS FROM EACH BRAND'S OWN FDD ITEM 20 FILING · METHODOLOGY
Retail & Products franchise questions, answered from the filings
How many retail & products 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 26 retail & products systems, the median system's exit rate in its latest fiscal year (fiscal 2023–2025) was 6.3%; pooled across systems, with no system counting for more than 20% of the weight, it was 10.7%. Ace Hardware alone is 64% of the sector's franchised base. Not every exit is a failure: some are retirements or sales.
How much does a retail & products franchise cost?
Across the latest FDD filings of 28 retail & products systems, the median initial franchise fee is $40K (Item 5) and the median total investment range is $176K–$388K (Item 7).
What royalty do retail & products franchises charge?
The median ongoing royalty across 28 retail & products franchise systems is 6.0% of gross sales, per Item 6 of their latest FDD filings.
Are retail & products franchises growing or shrinking?
In each system's latest Item 20 fiscal year (fiscal 2023–2025), the median retail & products system opened new franchised outlets at 7.3% of its starting base and lost 6.3% to exits. For the median system, openings outpaced exits.
What is the healthiest retail & products franchise?
Of the retail & products systems rated from their FDD Item 20 tables, Fleet Feet has the strongest record (verdict: Strong). A verdict describes the filed record, not a recommendation to buy.
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