Data Sources & Methodology

How we collect, organize, and analyze franchise data to help you make more informed decisions.

488
Franchise Brands
FDD
Primary Source
23
Items Analyzed

Primary Data Source

Our primary data source is the Franchise Disclosure Document (FDD) — a legal document that franchisors are required to provide to prospective franchisees under FTC Rule 436.

The FDD contains 23 disclosure items covering investment costs, fees, obligations, restrictions, financial performance (if disclosed), and system size data. This is the same document you would receive when requesting information from a franchisor.

What We Extract

From each FDD, we extract and organize:

  • Item 5: Initial franchise fee
  • Item 6: Ongoing royalties and marketing fees
  • Item 7: Estimated initial investment range
  • Item 19: Financial performance representations (when disclosed)
  • Item 20: System size, unit counts, openings, closures, transfers
  • Additional items: Territory rights, training requirements, operating restrictions

How We Process Data

Extraction

We review each FDD and extract relevant data points into a structured database. This involves both automated parsing and manual verification for accuracy.

Normalization

Different franchisors present data in different formats. We normalize data to enable consistent comparison (e.g., converting variable royalties to comparable percentages).

Scoring

Our screening algorithm weights multiple factors based on your stated criteria — capital range, operating model preference, risk tolerance, and system maturity requirements. Scores reflect fit against your inputs, not objective "best" or "worst" rankings.

Ranking

Brands are ranked by composite score relative to your specific criteria. The same brand may rank differently for different users based on their unique requirements.

Limitations

While we strive for accuracy, you should understand these limitations:

  • Data timing: FDDs are updated annually. Some data may be 6-12 months old.
  • Extraction accuracy: Despite quality controls, extraction errors are possible.
  • Interpretation: Some FDD disclosures require judgment to categorize or normalize.
  • Completeness: Not all franchisors disclose Item 19 financial data.
  • Scoring subjectivity: Our weighting methodology reflects our approach, not universal truth.

Always verify critical details against the actual FDD before making any investment decision.

What Our Reports Are

FranchiseLens reports are:

  • Research aids to help you organize and compare franchise opportunities
  • Starting points for more focused due diligence
  • Objective screens based on your stated criteria and public data
  • Time-saving tools to narrow a large market to a manageable shortlist

What Our Reports Are Not

Our reports are not:

  • Investment recommendations
  • Guarantees of accuracy or outcomes
  • Substitutes for reading the actual FDD
  • Substitutes for professional legal, financial, or franchise advice

Questions

If you have questions about our data sources or methodology, contact us at data@franchiselens.com.