When evaluating a franchise, growth matters.

But more growth does not automatically mean a better franchise.

A franchise system can grow too slowly, which may raise questions about franchisee satisfaction, unit economics, leadership, or the brand’s ability to attract qualified owners.

It can also grow too quickly, adding franchisees faster than its training, operations, real estate, marketing, and support infrastructure can handle.

The goal isn’t simply to find a franchise that’s growing.

The goal is to understand HOW it is growing and whether that growth appears sustainable.

Start With Item 20 of the Franchise Disclosure Document

One of the most valuable sections of the Franchise Disclosure Document (FDD) is Item 20: Outlets and Franchisee Information.

This is where you can begin looking behind the marketing story and examining what is actually happening within the franchise system.

Look at several years of data, not simply the current number of locations.

Ask:

• How many franchised locations are opening?
• How many are closing?
• How many franchises have been terminated or not renewed?
• How many locations have transferred to new owners?
• Is the system steadily expanding, relatively flat, or contracting?
• Are company-owned locations growing or shrinking?
• What does the franchisor project for new openings in the coming year?

One number rarely tells the whole story.

You are looking for patterns.

Growth Should Be Viewed in Context

Imagine two franchise systems.

Franchise A adds 40 locations in a year.

Franchise B adds 10.

At first glance, Franchise A may appear stronger.

But what if Franchise A also had 25 locations close, transfer, terminate, or otherwise leave the system?

And what if Franchise B added 10 locations while keeping nearly every existing franchisee?

Suddenly, the picture looks very different.

This is why I encourage candidates not to become overly impressed by a big development number.

Gross growth tells you how many locations were added. Net growth helps you understand what remained.

Both matter.

Pay Attention to Franchisee Turnover

Transfers deserve particular attention.

A transfer isn’t automatically negative. Franchisees sell businesses for all kinds of reasons: retirement, relocation, health, family circumstances, or simply because they are ready for their next chapter.

But an unusual pattern deserves investigation.

If a significant number of owners are leaving, ask why.

Likewise, terminations, non-renewals, reacquisitions, and closures shouldn’t automatically eliminate an opportunity. They should generate questions.

The FDD gives you data.

Your investigation gives that data context.

Can the Infrastructure Support the Growth?

Here is a question candidates sometimes overlook:

Can the franchisor actually support the number of franchisees it is adding?

A company may have an aggressive development plan, but new franchisees still need training, onboarding, marketing assistance, technology support, field operations, site-selection help where applicable, and ongoing coaching.

Ask the franchisor:

• How has your support team grown as the franchise system has grown?
• How many franchisees does each field support person typically serve?
• What support is provided during the first 90 days? The first year?
• What positions have you added recently to support growth?
• How has training changed as the system has expanded?
• What happens when a franchisee begins struggling?

There isn’t one perfect staffing ratio that applies to every franchise model.

A home-service franchise, restaurant system, senior-care business, boutique fitness concept, and B2B consulting franchise may require very different levels of operational support.

What matters is whether infrastructure is keeping pace with expansion.

Talk to Franchisees, Especially the New Ones

This is one of the most important parts of franchise due diligence.

Speak with franchisees who have been in the system for years.

But also make a point of talking with recently opened franchisees.

They have just experienced the process you may soon experience yourself.

Ask about:

• Initial training
• Opening support
• Marketing and lead generation
• Technology and systems
• Communication with the franchisor
• Unexpected challenges
• Responsiveness when they needed help
• Whether the onboarding experience matched what they were told during the investigation process

And don’t simply ask: “Are you happy?”

Ask questions that invite stories.

“Tell me about a time you really needed the franchisor’s help. What happened?”

That answer may tell you far more.

Meet the People Behind the Franchise

Numbers matter.

People matter, too.

As you progress through the investigation process, you will usually have opportunities to meet members of the franchisor’s leadership and support teams.

Pay attention.

Do they seem knowledgeable?

Are they transparent when answering difficult questions?

Do they understand the challenges franchisees face?

Do they appear genuinely interested in helping owners succeed?

And perhaps most importantly:

Can you picture yourself working with these people for the next five, ten, or even twenty years?

Remember, you are not simply buying a brand.

You are entering into a long-term business relationship.

Growth Is a Clue, not a Conclusion

A rapidly growing franchise isn’t automatically a great franchise.

A slower-growing franchise isn’t automatically a bad one.

Growth is simply another piece of evidence.

Your job is to understand why the system is growing, how existing franchisees are performing and behaving, whether owners are staying in the system, and whether the franchisor has built the infrastructure necessary to support its next stage of growth.

That is the difference between simply looking at franchise opportunities and actually investigating them.

At DreamMaker Franchising, that’s a big part of how we approach franchise exploration.

We educate. We guide. You decide.

Because the goal isn’t to find the franchise that’s growing the fastest.

It’s to find the right business for YOU and determine whether the system behind it is built to support where you want to go.

Curious about a franchise brand’s growth trajectory? Let’s take a closer look together. Book a quick Q&A with me.