INDUSTRY BENCHMARK · 14 SYSTEMS · FISCAL 2018–2025
Are retail & products franchises a good investment?
Across 14 retail & products franchise systems (11,586 franchised units), franchisees exited at an annualized rate of 1.9% in their latest FDD Item 20 filings, while new outlets opened at 4.0%. The median buy-in: a $40K franchise fee, 6.0% royalty, and a total investment of $141K–$345K.
People search for a “retail & products 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.
1.9%
216 exits / 11,353 units at start
4.0%
451 outlets opened
14
verified FDD extractions
11,586
at latest fiscal year end
$40K
FDD Item 5
6.0%
FDD Item 6
$141K–$345K
FDD Item 7
6/14
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 14 SYSTEMS · 14 FILINGS · FISCAL 2018–2025
| Signal | Brand | Verdict |
|---|---|---|
| STRONGEST | THE UPS STORE (TRADITIONAL) | Proven & strong |
| STRONGEST | THE UPS STORE NON-TRADITIONAL | Proven & steady |
| STRONGEST | 1-800-FLOWERS/1-800-FLOWERS.COM | Proven & steady |
| WEAKEST | FLOWERAMA | Too new to judge |
| WEAKEST | Splash and Dash Groomerie and Boutique | Too new to judge |
| WEAKEST | DaaBIN Store | Too new to judge |
VERDICTS SOURCED FROM EACH BRAND'S OWN FDD ITEM 20 FILING · METHODOLOGY
Retail & Products franchise questions, answered from the filings
What percentage of retail & products franchises fail?
There is no official failure rate, but FDD Item 20 filings show the honest proxy: across 14 retail & products franchise systems, 216 franchised outlets left their systems (terminations, non-renewals, and "ceased operations — other") out of 11,353 open at the start of the year — an annualized exit rate of 1.9% in fiscal 2018–2025. Not every exit is a failure (some are retirements or sales), but it is the measurable floor.
How much does a retail & products franchise cost?
Across the latest FDD filings of 14 retail & products systems, the median initial franchise fee is $40K (Item 5) and the median total investment range is $141K–$345K (Item 7).
What royalty do retail & products franchises charge?
The median ongoing royalty across 14 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 the latest Item 20 filings, retail & products systems opened new franchised outlets at an annualized rate of 4.0% while franchisees exited at 1.9%. Openings currently outpace exits in this industry.
What is the healthiest retail & products franchise?
By the Watch Desk verdict system (computed from FDD Item 20 with an evidence gate), the strongest verified retail & products system tracked is THE UPS STORE (TRADITIONAL).
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