System size

Item 20 shows how a franchise system changed over the last three fiscal years. The first table is a systemwide summary of franchised and company-owned outlets; later tables break out transfers, openings, terminations, non-renewals, reacquisitions and closures by state. The federal disclosure rule specifies those categories and requires contact information for current and certain former franchisees.

Reconcile the movement

Do not copy only the final total. For each year, begin with outlets at the start of the year, apply the disclosed movements and reconcile to the ending count. Keep ownership changes separate from physical openings and closings:

• A transfer usually means the outlet stayed open but changed franchisee.
• A reacquisition moves an outlet from franchised to company ownership.
• A termination, non-renewal or ceased operation may remove a franchised outlet for different contractual or economic reasons.
• A company opening adds a unit but does not show franchisee demand.

Definitions and table relationships matter. If the arithmetic does not reconcile, check footnotes, amended pages and whether the same outlet moved through more than one status during the year. Ask the franchisor to explain the bridge in writing.

Size is context, not a grade

The brand set ranges from mature systems to early franchise programs. The 2024 comparative records used here show Wienerschnitzel at 323 total outlets, Capriotti’s at 145 and Pepper Lunch at six US outlets. Shah’s Halal presents a different complication: its 2024 filing described many operating locations under license arrangements while reporting no operating franchises at the relevant year end. A consumer locator and an Item 20 franchise count can therefore both be accurate while answering different questions.

Young systems can offer direct access to founders and undeveloped markets, but a small comparable population makes support, purchasing, closures and Item 19 results harder to evaluate. Large systems offer more calls and operating history, but size does not prove attractive economics or good franchisee relations. Scale is evidence about sample size and organizational demands, not quality.

Use date labels every time. GDK’s 2025 Wisconsin filing page identifies a document effective in September 2025; The Halal Guys’ 2025 Wisconsin filing was effective in May 2025. Their Item 20 tables close on fiscal year-end dates before those filing dates. A location page viewed today is not a same-day comparison with either table.

Read beyond the count

Calculate simple movement measures, but label them carefully: openings as a share of beginning outlets, ceased operations as a share of beginning franchised outlets and transfers as a share of the franchised base. Do not collapse every departure into “failure.” A transfer may be healthy succession or distress; a reacquisition may be strategic or a rescue.

Then call people. The FTC recommends using the Item 20 lists rather than relying only on contacts selected by a seller. Choose current franchisees across opening years and performance contexts, plus former franchisees from the disclosed list. Ask what caused transfers or exits, how support changed with system growth and whether planned openings arrived on schedule.

Finally, compare development obligations with actual openings. A pipeline, signed agreement or “units wanted” map is not an outlet. Item 20 records what opened and what happened afterward. That is why it belongs beside Item 19 and Item 21: store movement, unit performance and franchisor financial capacity describe different parts of the same system.