---
title: A Few Bad Apples? | FranchiseGrade.com, Inc.
description: Systems that show bad attributes that may be unattractive to potential franchisees. These are some of the less competitive systems in the industry.
image: https://mvp.franchisegrade.com/hubfs/assets/images/reports/facts-and-figures/2015/fg-report-a-few-bad-apples.png
---

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###### Facts and Figures

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## Something Powerful

### Tell The Reader More

The headline and subheader tells us what you're [offering](https://mvp.franchisegrade.com/reports/facts-and-figures/a-few-bad-apples#), and the form header closes the deal. Over here you can explain why your offer is so great it's worth filling out a form for.

Remember:

- Bullets are great
- For spelling out [benefits](https://mvp.franchisegrade.com/reports/facts-and-figures/a-few-bad-apples#) and
- Turning visitors into leads.

![A Few Bad Apples? cover report](https://mvp.franchisegrade.com/hs-fs/hubfs/assets/images/reports/facts-and-figures/2015/fg-report-cover-a-few-bad-apples.png?width=537&height=567&name=fg-report-cover-a-few-bad-apples.png)

Studying the performance of the franchise industry as a whole, we might reasonably conclude that a franchised company should perform like a similar company in any other industry. Our research shows that there are many healthy, successful franchise systems enjoying sustainable growth, while other, unhealthy franchise systems, exhibit significantly high Franchisee Turnover Rates (FTR).

Based on a sample of 1900 franchise systems with 5 years of Item 20 data from 2010 to 2014, the franchise industry increased from 384,805 franchised outlets to 414,565 franchised outlets. This is an increase of 7.7% over the 5 years, or an average of 1.54% per year.

One sign of a healthy franchise system is positive net franchised outlet growth. By no means is it the only factor, but continued negative growth usually indicates an unhealthy franchise.

Looking within the overall industry reveals a stark contrast of results.  The chart below breaks down our sample into four quartiles, based on net franchised outlet growth.

 

 

*Based on Item 20 data from 2012 to 2014.

Of the 168,565 franchised outlets opened within a 5 year period, the bottom 25% of franchise systems with negative growth accounted for 25% of all new outlets opened. But they also represent 61% of the 138,825 outlets closed.

It's clear that the industry offers a healthy base of low-risk franchise investments, but prospective franchisees need to perform due diligence to ensure they invest into a quality system. And in a slow-growth economy, healthy franchise systems need to compete for their portion of the money invested in the franchise industry.

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    "addressCountry" : "United States of America",
    "addressLocality" : "Philadelphia",
    "addressRegion" : "Pennsylvania",
    "postalCode" : "19103",
    "streetAdress" : "Suite 3600, 1650 Market Street"
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    "name" : "Jeff Lefler"
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