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Research-backed articles on franchise costs, risks, and investment timelines — written for prospective franchise owners doing serious due diligence.
California's SB 919 takes effect July 1, 2026, requiring any franchise broker who sells to a California resident or places a buyer in a California location to register annually with the DFPI and deliver a Uniform Franchise Broker Disclosure Document before any sale. Before this law, brokers in California faced no registration or disclosure requirements, leaving buyers unaware of broker compensation arrangements with franchisors.
Conroe Corral Murphy LLC, a Golden Corral franchisee in Conroe, Texas, filed a Subchapter V Chapter 11 bankruptcy petition on June 8, 2026. This was the entity's second filing; the first was filed in February 2025 and dismissed in February 2026. Court documents list assets of $100,000 to $500,000 and liabilities of $1 million to $10 million. The business was still operating as of the filing date. Merchant cash advance debt has been identified as a significant factor in the entity's financial distress.
Multiple 2026 studies document the economic effects of California's $20 fast-food minimum wage, effective April 1, 2024. Edgeworth Economics estimated 9,600 to 19,300 California fast food jobs were lost in the year after the wage increase. A Washington Times analysis (April 7, 2026) found higher menu prices and reduced worker hours. Northeastern University researchers (April 24, 2026) documented accelerating automation adoption. UC Santa Cruz (March 2026) found that while retained workers saw higher pay, overall sector employment declined.
Transom Capital Group completed its acquisition of WellBiz Brands on January 22, 2026. WellBiz operates more than 700 franchise locations across five brands: Drybar, Elements Massage, Amazing Lash Studio, Fitness Together, and Radiant Waxing. The previous owner, KSL Capital Partners, had held the portfolio since 2019. For prospective franchisees, the ownership change signals a new growth phase: Transom reported 56 new franchise agreements signed in the first quarter of 2026 alone, indicating continued system expansion under new PE backing.
California's Fast Food Council has been effectively dormant since early 2025, when chairperson Nick Hardeman resigned. As of May 2026, Governor Newsom had not appointed a replacement, and the council had not convened in over a year. Created by AB 257 (FAST Recovery Act), the council sets wages and working conditions for workers at chains with 60+ locations. Its dormancy leaves future wage mandates uncertain for prospective buyers of California quick-service franchises.
On May 1, 2026, the CFPB issued a final rule excluding merchant cash advances from its Section 1071 small business lending data requirements, effective June 30, 2026. The change reverses the CFPB's 2023 position that MCAs are credit under ECOA. MCA providers will no longer be required to report pricing terms or approval data. For franchise buyers who use MCA financing, the exclusion removes the only federal transparency mechanism for comparing MCA rates — at a time when MCA debt has driven multiple franchisee bankruptcies in 2025 and 2026.
On May 12, 2026, Inspire Brands and Foodtastic signed a master franchise agreement to relaunch Dunkin' across Canada after an eight-year absence. Foodtastic holds exclusive rights to develop the brand nationally through corporate and franchised units, with the first opening expected in late 2026 or early 2027. CEO Peter Mammas projects 600 to 700 Canadian Dunkin' locations, starting in Toronto and Montreal. For franchise buyers, this deal opens a sub-franchise market with implications for territory pricing and agreement structure.
North County Pizza Inc., an 18-unit Domino's franchisee operating in the San Diego area, filed Chapter 11 on March 11, 2026, listing over $3.3 million owed to its top 20 unsecured creditors. The filing comes as the pizza sector faces compounding pressure from labor costs, food inflation, rising rents, and competition from delivery platforms. Papa John's and Pizza Hut are also closing hundreds of underperforming units in 2026.
In May 2026, Bricks & Minifigs parent BAM Franchising filed a RICO lawsuit against a YouTuber and a consignor after a viral dispute over a $200,000 LEGO collection at its Keizer, Oregon store. The dispute escalated through franchisee lawsuits, a store seizure, and social media backlash, culminating in the June 4, 2026 permanent closure of the Salem, Oregon franchise location. Franchise Times covered the case as an example of how a single-unit conflict creates systemwide brand damage.
Main Post Partners, a San Francisco private equity firm, acquired HomeWell Care Services in January 2026. The in-home senior care franchise operates 170 territories with more than 100 franchise owners across the U.S. The existing leadership team was retained, and the new owners have signaled aggressive growth targets following the brand's 113% revenue increase from 2022 to 2024.
On May 20, 2026, a Texas bankruptcy court approved the sale of Fat Brands to four separate buyers for approximately $1 billion, following the company's Chapter 11 filing in January 2026. Eleven brands including Round Table Pizza, Marble Slab Creamery, Fazoli's, Great American Cookies, and Johnny Rockets were sold to FBG Bid Co. for $595 million in a debt-to-equity conversion. Twin Peaks sold separately for $359.5 million. Hot Dog on a Stick sold for $8 million and Elevation Burger for $2.5 million.
Virginia Governor Abigail Spanberger signed HB 69/SB 240 on April 13, 2026, amending the Virginia Retail Franchising Act to ban post-termination non-compete provisions in franchise agreements effective July 1, 2026. The law also requires franchise agreements covered by the Act to be governed by Virginia law. A narrow exception allows non-competes of up to two years in voluntary franchise sale transactions. Agreements entered, extended, or modified before July 1, 2026 are grandfathered.
Yum Brands entered exclusive talks with LongRange Capital to sell its Pizza Hut business, Bloomberg reported on May 29, 2026. Competing suitors included Sycamore Partners and Apollo Global Management. Pizza Hut has posted seven consecutive quarters of U.S. same-store sales declines, down 3% in Q4 2025 and 5% for the full year. Yum is simultaneously executing the Hut Forward program targeting 250 U.S. closures by July 1, 2026. Pizza Hut accounted for roughly 12% of Yum revenue in 2025, versus 18% in 2019.
On June 8, 2026, Jack in the Box announced it would prepay $110 million of its Series 2019-1 Notes on June 10, 2026 — two months ahead of the anticipated August 2026 repayment date. The move was accompanied by Q2 fiscal 2026 results showing same-store sales of negative 3.8%, diluted EPS from continuing operations of $0.65, and a flat net unit count with 9 openings and 9 closures. The "Jack on Track" turnaround plan targets the closure of 150-200 underperforming locations with average unit volumes of $1.2 million and negative four-wall EBITDA.
Snap-on Incorporated acquired Diesel Laptops, LLC for approximately $100 million in cash on June 8, 2026. Diesel Laptops, based in Irmo, South Carolina, provides diagnostic software, repair information, and digital solutions for heavy-duty vehicle repair shops, fleets, and industries including mining, agriculture, and infrastructure. The acquisition was integrated into Snap-on's Repair Systems & Information Group. Snap-on distributes products primarily through its franchised dealer van network, meaning this catalog addition is directly relevant to current and prospective Snap-on franchisees.
A Village Inn franchisee, VI Land O Lakes LLC, filed Chapter 11 bankruptcy on June 10, 2026 in the U.S. Bankruptcy Court for the Middle District of Florida. The St. Petersburg-based operator listed over $85,000 in assets against over $234,000 in liabilities across three Florida locations in Land O Lakes, Brandon, and Zephyrhills. All three locations remain open. Revenue through June 10 stood at approximately $658,000, on pace for another annual decline. The filing was made without a stated specific reason.
Sun Gir Inc., a Carl's Jr. franchisee based in La Palma, California, filed Chapter 11 bankruptcy in April 2026 and is now liquidating all 59 of its California restaurants — selling 49 locations through National Franchise Sales and closing the remaining 10. The company cited California's $20-per-hour fast-food minimum wage as a key financial pressure.
Five Guys has closed at least 14 locations across California, Florida, Illinois, Iowa, Louisiana, Georgia, and Nebraska in the first half of 2026. The company cited financial hardship driven by elevated labor costs, lease renewal rates above initial projections, food input prices that have not retreated from post-2022 peaks, and a more price-sensitive customer base. No transfers were offered to displaced workers.
Seven & i Holdings plans to close 645 North American 7-Eleven locations in fiscal year 2026 (March 2026 to February 2027) while opening 205 new stores, for a net reduction of 440 locations. The closures support cost reduction and profitability improvement ahead of a planned U.S. IPO for the North American convenience store unit, which has been delayed at least once. Specific closing locations have not been publicly disclosed.
Wendy's appointed Robert D. Bob Wright as President and CEO effective May 21, 2026. Wright previously led Potbelly Corporation and served as Wendy's COO from 2014 to 2018. Total same-store sales fell 10.1% in the most recent reporting quarter; U.S. same-store sales were down 11.3%. The company plans to close approximately 300 U.S. locations in 2026, representing 5-6% of domestic store count, targeting consistently underperforming restaurants.
Pizza Hut is closing approximately 250 U.S. locations in the first half of 2026 as part of its Hut Forward strategy, representing under 4% of roughly 6,500 U.S. locations. System sales fell from $3.61 billion in 2024 to $3.47 billion in 2025, and global unit count dropped from 20,225 to 19,974. Hut Forward redirects the brand toward smaller, delivery-optimized formats with updated franchise agreements.
Papa John's announced plans to close approximately 300 North American locations through 2027, with around 200 closures occurring in 2026. The targeted units are franchise-owned, typically more than 10 years old, and generating less than $600,000 in annual sales. CFO Ravi Thanawala stated the closures are expected to raise average unit volumes across the system by at least 3%. Papa John's is also investing $18 million in supplemental marketing and franchisee subsidies to support remaining operators.
On May 21, 2026, Wendy's appointed Bob Wright as President and CEO. Wright previously ran Potbelly Corporation and held three separate operational stints at Wendy's between 1998 and 2019. Concurrent with the leadership change, Wendy's closed approximately 300 underperforming locations in the first half of 2026. Wright has stated his focus is on elevating customer experience, operational excellence, and strengthening the franchisee financial model.
Papa John's reported Q1 2026 global system-wide restaurant sales of $1.20 billion, a 3% decrease year-over-year. North America comparable sales fell 6.4% overall, with franchised units down 6.7% specifically. International comparable sales increased 3.6%. Adjusted diluted EPS was $0.32 versus $0.36 in the prior year quarter. The company reaffirmed full-year 2026 guidance of North America SSS -2% to -4% and global systemwide sales flat to down low-single-digits.
Sailormen Inc., a Miami-based Popeyes Louisiana Kitchen franchisee, filed Chapter 11 bankruptcy on January 15, 2026, in the U.S. Bankruptcy Court for the Southern District of Florida. The company reported approximately $232 million in assets and $342 million in liabilities, and a $18.8 million net operating loss for fiscal 2025. At filing, the company operated 136 Popeyes restaurants in Florida and Georgia; by March 2026 that number had fallen to 119. A court-ordered sale auction must occur by June 15, 2026, with closing by June 30.
Wingstop reported an 8.7% decline in domestic same-store sales for Q1 2026, ended March 28, 2026, driven by temporary weather closures affecting over 700 locations and elevated gas prices. Total revenue grew 7.4% to $183.7 million on 17% unit growth. The company revised full-year 2026 guidance to a low-single-digit domestic same-store sales decline. Brand partner (franchisee) margins improved despite the comp decline.
A Midwest franchisee owning 10 Slim Chickens locations across Missouri, Kentucky, and Illinois filed a fraud lawsuit claiming the brand showed inflated earnings projections, concealed a switch to frozen chicken, and violated FTC Franchise Rule disclosure requirements. A Washington County, Arkansas court denied Slim Chickens' motion to dismiss in March 2026, allowing the claims to proceed. The franchisee reported investing more than $15 million in its locations.
Two Washington state Jack in the Box franchisees—AJP Enterprises and NHG Enterprises, both owned by Steve Wazny—filed a lawsuit on March 27, 2026, to block the termination of 39 Seattle-area restaurants. Jack in the Box terminated the franchise agreements over $1.4 million in unpaid marketing fees and then counter-filed a restraining order to prevent AJP from closing 38 restaurants. The operator originally acquired the 39 locations from Jack in the Box in 2012 for $27 million.
Planet Fitness reported Q1 2026 total revenue of $337 million, a 21.9% year-over-year increase, but cut its full-year same-club sales guidance from 4–5% to approximately 1%. The company paused its planned Black Card price increase, and net new members exceeded 700,000 but trailed the prior year's comparable period. Shares dropped 31% on May 7, 2026. Franchisee adjusted EBITDA margin contracted from 73.7% to 70.4%.
Smithfield Foods agreed to acquire Nathan's Famous for approximately $450 million ($102 per share) in a deal announced in early 2026. Smithfield has held an exclusive license to produce Nathan's Famous hot dogs and sausages since 2014. The acquisition values Nathan's at 12.4x trailing twelve-month adjusted EBITDA, with expected annual synergies of $9 million. Nathan's operates a franchise restaurant system of approximately 350 locations. The deal is expected to close in H1 2026.
Jack in the Box named Mark King Executive Chairman and Interim CEO effective May 13, 2026, replacing Lance Tucker. King previously led Taco Bell (2019-2023) and Xponential Fitness (2024-2025). The change came as Q2 2026 revenues fell 4.3% to $254.3 million. The company is conducting a formal search for a permanent CEO. For franchisees, the leadership change signals a period of strategic review amid ongoing system challenges.
Wendy's plans to close 298 to 358 U.S. locations in the first half of 2026 under its Project Fresh turnaround plan. The closures target consistently underperforming restaurants, selected in partnership with franchisees. U.S. same-store sales fell 5.6% for all of 2025 and 11.3% in Q4 alone. The chain is pivoting to an everyday value positioning after leaning too heavily on short-run promotional pricing.
A 2026 franchise industry survey found 73% of businesses report tariff impact on operations, with 66% citing higher supply costs, 41% reduced margins, and 40% raising prices. New tariffs under Section 122 of the Trade Act of 1974 set a 10% global rate, raised to 15%, expiring after 150 days (approximately late July 2026). Restaurant franchises face the most direct exposure due to imported food costs; buildout costs are also elevated by 25% steel and aluminum tariffs affecting kitchen equipment and construction.
McDonald's reported Q1 2026 comparable sales growth of 3.8% and net revenue up 9% to $6.52 billion, announced May 7, 2026. Adjusted EPS was $2.83, above the prior-year $2.60. The result came while Popeyes reported -6.5% SSS and Domino's posted just 0.9% U.S. comp growth in the same quarter. For buyers evaluating QSR franchise investments in the $1M to $2M+ range, McDonald's Q1 data provides a benchmark for what a mature, well-capitalized system can generate and offers context for evaluating weaker-performing alternatives.
Domino's reported Q1 2026 results on April 27, 2026: U.S. same-store sales of 0.9% missed the 2.6% consensus and decelerated from 2.9% in Q1 2025. International comparable sales fell 0.4% ex-FX. Net income fell 6.6% to $139.8 million on revenues of $1.15 billion, up 3.5%. Franchisees pay a combined 11.5% of sales in royalties and advertising fees; at 0.9% SSS growth, that obligation compounds pressure on operators whose labor, food, and rent costs are rising faster than top-line revenue.
Restaurant Brands International reported Q1 2026 results on May 6, 2026, with consolidated system-wide sales of $11.5 billion, up 6.2% year-over-year. Burger King U.S. comparable sales rose 5.8%, reversing a 1.1% decline from Q1 2025 and beating the 3.5% Wall Street estimate. Popeyes comparable sales fell 6.5%, dramatically worse than the 1.5% decline analysts had forecast. Tim Hortons comparable sales rose 1.6%. Adjusted EPS of $0.86 beat the $0.82 consensus. The divergent results have different implications for buyers evaluating Burger King versus Popeyes franchise investments.
Neighborhood Restaurant Partners Florida (NRPF), which operated 53 Applebee's restaurants across Florida, Georgia, and Alabama, filed for Chapter 11 bankruptcy protection in early 2026. The company reported $1–$10 million in assets against $10–$50 million in liabilities, including over $13 million owed to lender Equity Bank. NRPF closed 14 locations before filing and sought lease rejections on 10 more. Franchisor Dine Brands' Applebee's brand plans to acquire the remaining restaurants and leases through a stalking-horse asset sale, targeting completion by mid-May 2026.
ARC Burger, operator of 77 Hardee's restaurants across nine states, filed Chapter 7 bankruptcy on April 20, 2026, in U.S. Bankruptcy Court for the Northern District of Georgia. Hardee's terminated the franchisee in late 2025 over $6.5 million in unpaid royalties, marketing fees, and rent on 28 of its 77 locations. The company listed $500,000–$1 million in assets against more than $29 million in estimated liabilities. ARC Burger was formed in 2023 when private-equity firm High Bluff Capital acquired those locations from the bankrupt Summit Restaurant Holdings.
Monomoy Capital Partners signed a definitive agreement on March 4, 2026 to acquire Jiffy Lube International from Shell's SOPUS Products subsidiary for approximately $1.3 billion. The deal also includes Premium Velocity Auto (PVA) LLC, the second-largest Jiffy Lube franchisee. Jiffy Lube operates over 2,000 franchised service centers across North America serving more than 19 million vehicle owners annually. A long-term Pennzoil lubricant supply agreement was signed as part of the transaction. Closing is expected in the second half of 2026, pending regulatory approval.
Ghai Restaurants, a California-based multi-unit franchisee, acquired 44 Houston-area Taco Bell locations from the private-equity owner of Mas Restaurant Group in May 2026. The deal more than doubles Ghai's Taco Bell footprint to 81 units and brings its overall portfolio to roughly 260 restaurants across Taco Bell, Burger King, and Popeyes. CEO Harsh Ghai cited California's high labor costs and Taco Bell's record of just one negative same-store-sales quarter in a decade as the rationale.
Wendy's appointed Bob Wright president and CEO effective May 21, 2026, ending a year-long search after Kirk Tanner departed in July 2025. Wright most recently led the turnaround of Potbelly until its $566 million sale to RaceTrac, and previously spent years as Wendy's chief operations officer. He inherits a chain with five consecutive quarters of negative same-store sales, including -11.3% in Q4 2025 and -7.8% in Q1 2026, and explicit pressure from largest shareholder Nelson Peltz to explore a sale.
A Texas bankruptcy court on May 20, 2026 approved the sale of more than a dozen FAT Brands concepts in a process valued at nearly $1 billion. Lender groups won the largest assets via credit bids: $595 million for 14 concepts including Fatburger, Johnny Rockets, Round Table Pizza, and Fazoli's, and $359.5 million for Twin Peaks. Smaller cash buyers picked up Hot Dog on a Stick ($8 million) and Elevation Burger ($2.5 million). Smokey Bones permanently shut down. Former CEO Andy Wiederhorn stepped aside as part of the agreement.
Lena Brands, the Oregon-based owner of family-dining chains Shari's and Coco's, filed for Chapter 11 protection in Delaware in May 2026 with $1 million-$10 million in assets and $10 million-$50 million in liabilities, including over $5 million owed to roughly 10 merchant cash advance lenders. Stripe had frozen about $650,000 in DoorDash and Grubhub payments after MCA lenders filed claims, leaving the 11-restaurant chain unable to fund payroll, rent, and other obligations.
Sun Gir Inc., the lead debtor behind California's largest Carl's Jr. franchisee group (Friendly Franchisees Corporation, 59 stores, roughly 1,000 employees), filed Chapter 11 in April 2026 and in May moved to reject leases at 10 underperforming California restaurants. Court filings say the group generates more than $6 million in monthly revenue but is losing more than $600,000 per month in 2026, with most pressure tied to California's $20 fast-food minimum wage that took effect in April 2024.
Chaac Pizza Northeast, a 111-unit Pizza Hut franchisee, filed a Texas lawsuit in May 2026 seeking at least $100 million from Pizza Hut and Yum Brands. The complaint alleges that Yum's mandatory Dragontail AI delivery-management system, fully deployed in Chaac's New York stores in 2024, caused cascading operational breakdowns, stretched delivery times from 30 to 45-plus minutes, and dropped New York City same-store sales from +10.19% to -9.78% in a single quarter.
On April 20, 2026, Jersey Mike's Subs filed a confidential S-1 with the SEC, initiating the IPO process. Majority owner Blackstone (which acquired its stake in 2024 at an ~$8 billion valuation) is targeting a $12 billion valuation and a $1 billion raise, with a potential Q3 2026 debut. Jersey Mike's operated 3,227 locations at the start of 2026, making it the second-largest U.S. sub chain by sales. The full S-1 is not yet public. Franchise buyers should request an updated FDD after any IPO-related changes are disclosed.
7-Eleven plans to close 645 North American stores in fiscal year 2026 (March 1, 2026–February 28, 2027), its fifth consecutive year closing more stores than it opens. With 205 new openings planned, the net reduction exceeds 440 locations, dropping the North American count to approximately 12,272. Parent company Seven & i Holdings has delayed a planned IPO to 2027. Some closed locations convert to wholesale fuel sites. The closures reflect a pivot to larger, food-forward convenience formats.
In late March 2026, KKR agreed to acquire Nothing Bundt Cakes from Roark Capital for more than $2 billion, including debt. The deal is confirmed in a KKR SEC Form 8-K. Nothing Bundt Cakes has approximately 600 locations; Roark added 390 of them since acquiring the company in 2021. At $2B for ~600 units, the implied per-location enterprise value is approximately $3.3 million. Prospective franchisees should request an updated FDD after the deal closes and evaluate territory saturation risk given the expected continued expansion push under KKR.
On May 13, 2026, Jack in the Box announced that CEO Lance Tucker had departed after just 14 months following Q2 fiscal 2026 results that 'did not meet expectations.' Mark King—a board member since November 2025 and Board Chair since March 2026, formerly CEO of Taco Bell—was named Executive Chairman and Interim CEO. Chief Customer and Digital Officer Ryan Ostrom also departed. The JACK on Track strategy is expected to continue. Jack in the Box operates approximately 2,200 franchised restaurants.
On May 20, 2026, Choice Hotels International announced that President and CEO Patrick Pacious had stepped down. The board appointed Dominic Dragisich—Chief Growth and Strategy Officer—as Interim CEO effective the same day. Pacious will serve as an advisor through August 31, 2026. The board has engaged a search firm to identify a permanent CEO. Choice Hotels operates approximately 6,000+ franchised hotels across Comfort Inn, Quality Inn, Clarion, Sleep Inn, and Cambria, among other brands.
In March 2026, the FTC settled with Xponential Fitness for $17 million—the largest franchise consumer refund in FTC history. The company misrepresented studio opening timelines (claiming 6 months; reality was 12+ months or never), concealed that former CEO Anthony Geisler had been repeatedly sued for fraud, hid a senior executive’s bankruptcy, and falsified Item 20 franchisee contact lists. Affected brands include Club Pilates, Pure Barre, YogaSix, StretchLab, and BFT.
Wendy's reported Q1 2026 results on May 8, 2026: U.S. same-restaurant sales fell 7.8%, global system-wide sales fell 5.5%, and adjusted EBITDA was $111M. Management is closing 300-350 franchised U.S. units — about 5-6% of the U.S. system — to improve franchisee unit economics. For prospective franchise buyers, the takeaway is twofold: large QSR systems are visibly re-pricing weak trade areas, and franchisor-led closures of underperforming franchise locations are now an accepted lever rather than an emergency one.
On May 7, 2026, eXp World Holdings acquired NextHome, Inc., adding 5,400+ agents, 500+ franchisees, and 30,600+ 2025 transaction sides to its 83,000-agent cloud brokerage. The deal closed on announcement; terms were undisclosed and eXp used cash on hand. NextHome will operate as a standalone franchise brand. For real estate brokerage franchisees, the takeaway is that a public, well-capitalized buyer now stands behind one of the most agent-friendly franchise models in residential brokerage — but governance decisions in the next 12 months will determine whether the model survives integration.
On May 8, 2026, Inspire Brands submitted a confidential IPO filing to the SEC. The Roark Capital portfolio company owns Dunkin', Arby's, Baskin-Robbins, Buffalo Wild Wings, Sonic and Jimmy John's. Proceeds are slated to repay debt and pay offering fees. For prospective franchisees of any Inspire brand, the filing signals a likely shift toward public-market financial discipline: tighter unit-economics reporting, possible royalty or marketing-fund adjustments, and renewed scrutiny on AUV (average unit volume) ranging from $526,669 at Baskin-Robbins to $3.57M at Buffalo Wild Wings.
Cassava Roots, the Mexico City bubble tea franchisor founded in 2008 by Daniela and Patricio Lombardo, announced on May 8, 2026 that it will launch a U.S. franchise model this year. The company restructured down to 73 Mexican stores after closing roughly 30 underperforming sites, is integrating AI into operations, and is in early talks with beverage and retail distribution partners. Spain expansion is also being explored.
Subway's 2026 FDD, released April 30, 2026, reports a net 729-store decline in U.S. units during 2025 — the chain's steepest annual contraction since 2021. Net income at the franchisor rose to $688 million, but franchise revenue fell 6% to $767 million as royalties dropped. A 43-unit operator, MTF Enterprises, filed Chapter 11 over Merchant Cash Advance distress. Subway projects only 100 new U.S. openings in 2026.
On May 7, 2026 eXp World Holdings acquired NextHome, a 500-franchisee real estate network. NextHome will continue as a separate franchise brand while eXp now operates a multi-model platform offering both cloud brokerage and traditional franchising. eXp's stock began trading under the new ticker AGNT on May 8, 2026, with NextHome leadership moving into eXp president roles.
Red Door Brands is exiting Chapter 11 with Kayla Edidin as new 60% owner and COO; founder Argus Wiley stays CEO. The company emerges with 16 units across McAlister's Deli, Little Caesars, Arby's, and Main Squeeze Juice Co. after shedding its Del Taco portfolio. Wiley attributes the bankruptcy to merchant cash advance debt (~$2.7M across 10 loans / 9 vendors) and cross-brand personal guarantees. The lessons for buyers: avoid MCA loans, isolate guarantees by brand, and grow only inside systems whose unit economics you have already validated.
Houston franchisee Gulf Coast Jacks (35 stores) filed a 232-page amended complaint against Jack in the Box in late April 2026, alleging the franchisor priced corporate-era stores against peak sales then attached a rent formula at 9.5% of 90% of pre-sale gross sales plus royalty rates as high as 10% — double the chain's standard 5%. The complaint says the structure extracts value twice: via the sale price and via ongoing rent and royalty calibrated to the same peak sales. Jack in the Box says the suit is without merit.
Applebee's countersued franchisee Apple Texas (SSCP Management) in Kansas court on May 2, 2026, arguing SSCP's late-2025 buy of the 115-unit Logan's Roadhouse chain breaches the noncompete in their franchise agreements. The countersuit answers a March 2026 suit Apple Texas brought over dual-branded Applebee's-IHOP encroachment in its claimed exclusive territory. For prospective franchisees, the case shows how noncompete clauses, territory rights, and development-quota tripwires can all be invoked together against an operator who diversified.
Apple Texas Restaurants and SSCP affiliates filed a federal lawsuit in Kansas against Applebee's parent Dine Brands in March 2026, alleging the franchisor allowed a dual-branded Applebee's-IHOP to open in Euless, Texas — within Apple Texas's exclusive territory. At least four additional dual-branded units are scheduled within protected territories. Dine sent a notice of default on April 3, 2026, threatening termination. The case will test how dual-brand rollouts interact with single-brand exclusive territory rights as Dine pushes toward 80 dual-brand US units by year-end 2026.
Real Brokerage announced an $880 million deal on April 27, 2026 to acquire RE/MAX Holdings, creating a combined platform of 180,000-plus agents across 120-plus countries. RE/MAX brings approximately 145,000 franchise agents; Real adds about 33,000 owned-brokerage agents. RE/MAX and Motto Mortgage will continue under their existing brands and franchise models. Close is expected in the second half of 2026, subject to shareholder and regulatory approval. Real has $550 million in financing from Morgan Stanley and Apollo for the cash portion and to refinance RE/MAX debt.
Subway closed a net 729 US restaurants in 2025, ending the year at 18,773 units — a tenth consecutive year of net decline. Between 2016 and 2025 the chain has shed roughly 8,345 US units from its 2015 peak of about 27,000. Same-store sales have been falling since 2012, and the unit count has tracked them. Subway remains the largest US restaurant brand by unit count — ahead of Starbucks (16,860) and McDonald's (13,706) — but the trajectory is the most relevant data point for prospective franchisees evaluating this brand in 2026.
Wingstop reported an 8.7% domestic same-store sales decline in Q1 2026, its first full-year annual comp drop in 22 years. Domestic AUVs fell to approximately $2.0 million from $2.1 million in 2024, a $138,000 decrease per unit. Despite the headwind, the brand opened 97 net new units in Q1 2026. Total initial investment is approximately $580,000, with historical payback under two years—though that math tightens as AUVs compress. Buyers should model AUVs in the $1.9M-$2.1M range for 2026-2027.
7-Eleven is closing 645 North American convenience stores in fiscal year 2026 (March 2026 through February 2027), its fifth consecutive year of more closures than openings. Parent Seven & i Holdings delayed a planned IPO to 2027. The closures reflect lower-income consumer spending pullbacks, inflation, and overexpansion. With only 205 new openings planned, the net store count will fall by roughly 440 units—contrasting with Seven-Eleven Japan, which is net-expanding by about 200 units in the same period.
Papa John's and Pizza Hut are closing a combined 450 underperforming US locations in 2026, both citing negative four-wall income and AUVs below $600,000. Wendy's is also closing approximately 300 US locations in the same period. Both pizza chains frame the closures as portfolio optimization that will raise systemwide AUVs by 3% or more. A potential sale of the Pizza Hut brand adds ownership uncertainty for prospective franchisees.
Jersey Mike's Subs filed a confidential IPO with the SEC on April 20, 2026. Blackstone, which bought a majority stake in 2024 at an $8 billion implied valuation, is targeting a $12 billion IPO valuation and plans to raise more than $1 billion. The offering could debut as early as Q3 2026. At $12 billion against projected 2025 revenue of $309.8 million, the implied price-to-sales ratio of 38.7x is far above the 2.5x restaurant industry average, reflecting substantial expected unit growth.
KKR is acquiring Nothing Bundt Cakes from Roark Capital for $2 billion. The 700-unit dessert franchise reported AUVs above $1.4 million for mature stores in 2024. The deal shifts brand ownership from one private equity firm to another, with KKR expected to accelerate unit growth. Buyers should watch for potential changes to vendor programs, technology fees, and territory development requirements as the new owner executes its strategy.
In March 2026, the FTC settled with Xponential Fitness for $17 million—the largest consumer refund in franchise history—over FDD violations covering Club Pilates, Pure Barre, YogaSix, StretchLab, and BFT. Violations included falsely claiming studios open in 6 months (actual: 12-plus), hiding ex-CEO Anthony Geisler's fraud lawsuits from FDD Item 3, and omitting closed franchisees from Item 20. A separate class-action brought combined settlements to $39.75 million.
Roughly 65–70% of franchise owners report being satisfied with their businesses — higher than most career satisfaction benchmarks, but well below the "best decision of my life" narrative in franchise sales materials. Satisfaction varies dramatically by brand and category: home services and B2B franchises routinely exceed 80%, while food service and fitness franchises are significantly more polarized. The gap between the happiest and unhappiest owners within the same brand often comes down to three variables — all of which are assessable before you sign.
Most franchise owners reach break-even profitability between 12 and 24 months, though the range spans from 6 months for low-overhead service franchises to 36+ months for full-service restaurants. The three biggest variables are initial investment size, whether you operate the business yourself, and category overhead structure. Approximately 15% of franchise locations never reach sustained profitability before the owner exits.
The main risks of owning a franchise are: financial risk (undercapitalization, hidden fees), territory and market risk (saturation, demographic shifts), franchisor risk (leadership changes, support collapse), operational risk (staffing, supply chain), contract risk (non-compete clauses, renewal terms), category risk (secular decline, disruption), and personal risk (lifestyle impact, opportunity cost). Every one of these risks is assessable before you sign — most are disclosed in the Franchise Disclosure Document. This article walks through each risk with specific FDD checkpoints so you know ex
Five factors predict franchisee success with statistical consistency across 810+ brands: unit economics (investment-to-revenue ratio and break-even speed), franchisor support infrastructure (training depth and field support frequency), territory protection and market fit (protected radius and demographic alignment), category tailwinds (growing vs. declining demand), and owner-operator alignment (skills match and capitalization adequacy). All five are measurable from FDD data before you sign. Most "franchise success" articles skip the first four entirely — because they're written by franchisors
Yes, franchise ownership can make you a millionaire — but only under specific conditions. Based on our analysis of 810+ franchise brands, reaching $1M in cumulative owner income typically requires multi-unit ownership in one of 4 high-margin categories, $250K–$500K in starting capital, and a 7–10 year timeline. The majority of single-unit franchise owners earn between $50K–$120K annually.
The real franchise failure rate is approximately 20–25% within the first 5 years, though it varies significantly by brand and category. The widely-cited "90% success rate" is misleading — it originates from a 1980s-era study that counted any franchise still operating (including those losing money) as a "success." FDD Item 20 data, which tracks actual outlet closures, shows that some franchise brands have closure rates above 30% while others are below 5%.