{{title}}
{{byline}}
{{byline}}
Franchise Update Media released its 2026 Annual Franchise Development Report.
We have been researching franchise lead generation and franchise recruitment processes for more than a decade. An annual in-depth online survey queries franchise development professionals about a number of issues related to their lead generation and recruitment strategies. The results are presented each year in the Annual Franchise Development Report (AFDR).
The AFDR report is a valuable resource that can provide crucial insights into franchise development, lead generation, and recruitment best practices. It’s the kind of information that can help brands assess what they are doing right and what needs improvement.
The project seeks to identify what’s new and innovative in franchise lead generation, recognize the methods and approaches yielding the best results, and gain insights into franchisors’ perspectives on current and future business performance.
Survey participants were franchisors who completed an in-depth questionnaire online. Responses were aggregated and analyzed to produce a detailed view into the recruitment and development practices, budgets, spending allocations, and strategies of a wide cross-section of franchisors. The data, along with accompanying commentary and analysis, provided the basis for the 2026 AFDR.
The in-depth report draws on insights from dozens of organizations that are actively expanding their franchise systems. Carefully researched and data-rich, it highlights the latest trends and sheds light on how brands are generating leads and closing franchise sales today. The AFDR reflects input from companies representing tens of thousands of franchise units across dozens of industry categories.
Franchise Update Media creates this report annually and shares its findings with franchise development teams to give them an edge in their lead generation and recruitment efforts.
One of the important parts of the due diligence process for a franchise candidate is to thoroughly review a Franchise Disclosure Document (FDD). This annual document is designed to ensure transparency for prospective franchisees and covers areas such as fees and investments, financial performance, and other statements showcasing the company’s financial health.
Although every FDD follows the same 23-item format, the amount of information each franchisor provides varies. In the latest AFDR, Franchise Update asked respondents about whether they included Financial Performance Representations in their FDD and what is covered in their Item 19.
We first asked if franchises provide FPRs (Financial Performance Representations) in their FDD, and 84 percent of all respondents said they do. When analyzing by general business category, all those in retail (food) and retail (non-food) and 90 percent in service (brick-and-mortar) said they provide FPRs in their FDDs.
When looking at responses based on investment level, those with the greatest financial commitments include FPRs at a slightly higher rate. Groups with investment levels of $500,001 to $1,000,000 and greater than $1,000,000 each responded with 92 percent.
Every franchise brand in the survey with more than 100 units included an FPR in its FDD.
The survey also asked respondents about some of the information they include in Item 19 of their FDD. Starting with general business categories, nearly every sector said they include revenue. Expenses, and then profitability, were the next most popular responses, with 100 percent of franchises in the retail (non-food) categories indicating they include both in their Item 19. Very few groups include their entire P&L statement in that section.
A similar response was also reflected when looking at answers based on investment level and unit size. Franchises that had yet to open a unit had the highest percentage of disclosures in each category, showcasing the need to provide candidates with the most information available about the brand’s financial outlook.
All franchises with 2,501 to 5,000 units included information about revenue and expenses in their Item 19s.
For more information about the 2026 AFDR and how you can purchase the report, please scan the QR code below or click afdr.franchiseupdate.com.