Item 20, outlet tables

Item 20 is the system’s recent history as a set of tables. 16 CFR 436.5(t) requires a systemwide summary, tables of transfers, status changes by state, projected openings, and contact information for current franchisees and certain former franchisees. A store locator is a marketing map. Item 20 is a movement schedule.

Reconcile, then interpret

For each fiscal year, start with beginning counts, apply openings, terminations, non-renewals, reacquisitions, cessations and transfers, and land on the ending count. If the arithmetic fails, read footnotes. If it still fails, ask for a written bridge. Do not “fix” the table.

Keep ownership changes separate from physical closings. A transfer can be a healthy succession or a distressed sale. A reacquisition can be a strategy or a rescue. Item 3’s franchisor-initiated litigation, if any, sometimes explains a cluster of terminations. Validation calls explain the rest.

Licensed is not franchised

Shah’s Halal Food’s FDD issued 10 April 2024 reported 58 total outlets as of 2023: 14 company, 0 franchised. Forty-four of the 58 operated under a license agreement rather than a franchise. Item 20 stated that no franchises were operating as of the filing. A buyer who counts pins on a map and writes “58-unit franchise system” has misread the table.

Call the population you are joining. If there are no franchisees, you are an early franchisee in a licensed-and-company world. Support, supply and exit rights may have been designed for licensees. That can be a chance. It is not a 58-unit validation sample.

International websites are not US Item 20

Pepper Lunch’s May 2024 comparative record discloses 6 US units, all franchised, 0 company, as of 2024. The brand’s own site claims over 500 locations across fifteen countries. Both statements can be true. Only one of them is this offering’s Item 20. A development pitch that leads with 500 is answering a different question than “how many US shops opened, transferred or closed in the last three years?”

GDK’s FDD issued 3 September 2024: 7 units at year-end 2023, all franchised. Item 1 of the same filing claimed nine open by issuance. Reconcile. 375° Chicken ‘n Fries’s FDD issued 30 April 2024: 5 total, 3 company, 2 franchised, as of 2023. Mad for Chicken’s FDD issued 3 May 2024: 19 total, 14 company, 5 franchised, as of 2023. Affiliate-heavy systems produce affiliate-heavy Item 19 samples; Item 20 is how you see that coming.

The large end of the set

Wienerschnitzel, May 2024 comparative study: 323 total, 246 franchised, 77 company, as of 2024. Capriotti’s, same source: 145 total, 135 franchised, 10 company. The Halal Guys: 93 total, 88 franchised, 5 company. Dog Haus: 58 total, all franchised. Those bases can support a real call sample. They still need movement tables. A 323-unit system that is shrinking in the buyer’s state is not the same offering as a 323-unit system that is stable.

The Great Greek Mediterranean Grill, FDD issued 17 August 2023: 31 total, 24 franchised, 7 company, as of 2023. Crave Hot Dogs and BBQ, May 2024 comparative study: 26 total, all franchised. bluTaco: 34 total, 33 franchised, 1 company. Döner Haus, 2026 FDD: 6 total as of 2026. Small ending counts make every opening and every closure loud. That is information.

Contacts are the second half of the Item

The current-franchisee list and the former-franchisee list are required disclosures, not a favor. The FTC walkthrough tells buyers to use them. Projected openings, when disclosed, are plans. They belong next to last year’s actual openings, not in place of them.

The league table below sorts this set by disclosed unit count. Year is the count’s as-of year, which is not always the filing year.

Transfers are not openings

A transfer keeps the shop on the street and changes the name on the agreement. Item 20 reports them separately because they are not demand for new boxes. A year with many transfers and few openings can still look “busy” on a locator. Ask whether transfers clustered after a remodel mandate, a fee change, or a territory dispute. Item 3 sometimes names the fight. Former-franchisee calls name the rest.

Reacquisitions — franchisor buying the shop back — similarly preserve a pin and change the economics. Company count goes up; franchised count goes down. Mad for Chicken’s 14 company / 5 franchised split (FDD issued 3 May 2024) and 375°’s 3 company / 2 franchised (FDD issued 30 April 2024) mean most of the operating knowledge may sit in affiliate shops. That is visible in their Item 19 samples. It should also be visible in who answers the phone when you ask for a franchisee.

Projected openings, when the Item includes them, are plans. Compare last year’s projection, if you have last year’s FDD, with this year’s actual openings. A development heatmap that says “40+ units wanted” is not even a projection in the Item 20 sense. File it with the marketing art.

The Great Greek Mediterranean Grill’s 24 franchised of 31 as of 2023 (FDD issued 17 August 2023) is a mixed system with a 35-year term: transfers, when they happen, are sales of a very long remaining contract. Wienerschnitzel’s 246 franchised of 323 cannot be transferred if the comparative record’s “no right to sell” is the operative clause — which makes the transfer table, if any, a question for counsel rather than a market.

Related reading

• System size — why movement beats the ending number
• Validation calls — how to sample the lists
• Item 1, the franchisor — narrative counts vs tables
• Item 19 — whether the performance sample matches the outlet population
• Red flags in franchise marketing — pipeline maps that are not Item 20