INDUSTRY BENCHMARK · 28 SYSTEMS · FISCAL 2022–2025
Are business services franchises a good investment?
Across 28 business services franchise systems (10,687 franchised units), franchisees exited at an annualized rate of 8.1% in their latest FDD Item 20 filings, while new outlets opened at 8.1%. The median buy-in: a $27K franchise fee, 6.0% royalty, and a total investment of $69K–$120K.
People search for a “business services franchise failure rate,” but no such official number exists. What franchisors must disclose — in the Item 20 outlet tables of the FDD — is how many franchised outlets were terminated, not renewed, or “ceased operations — other reasons” each year. That annualized exit rate is the honest, measurable proxy: it slightly overstates failure (some exits are retirements or sales) and slightly understates distress (struggling units often sell before they close), but unlike survey numbers it comes from legally mandated disclosures.
8.1%
881 exits / 10,842 units at start
8.1%
880 outlets opened
28
verified FDD extractions
10,687
at latest fiscal year end
$27K
FDD Item 5
6.0%
FDD Item 6
$69K–$120K
FDD Item 7
16/28
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 28 SYSTEMS · 28 FILINGS · FISCAL 2022–2025
| Signal | Brand | Index | Grade |
|---|---|---|---|
| STRONGEST | Website Closers | Proven & strong | |
| STRONGEST | SIGNAL 88 SECURITY | Proven & strong | |
| STRONGEST | FREEWAY INSURANCE® | Proven & strong | |
| WEAKEST | REGUS OFFICE | Too new to judge | |
| WEAKEST | Trustegrity | Too new to judge | |
| WEAKEST | Regus | Too new to judge |
HEALTH INDEX: SOURCED 0–100 SCORE FROM EACH BRAND'S OWN FDD ITEM 20 · METHODOLOGY
Business Services franchise questions, answered from the filings
What percentage of business services franchises fail?
There is no official failure rate, but FDD Item 20 filings show the honest proxy: across 28 business services franchise systems, 881 franchised outlets left their systems (terminations, non-renewals, and "ceased operations — other") out of 10,842 open at the start of the year — an annualized exit rate of 8.1% in fiscal 2022–2025. Not every exit is a failure (some are retirements or sales), but it is the measurable floor.
How much does a business services franchise cost?
Across the latest FDD filings of 28 business services systems, the median initial franchise fee is $27K (Item 5) and the median total investment range is $69K–$120K (Item 7).
What royalty do business services franchises charge?
The median ongoing royalty across 28 business services franchise systems is 6.0% of gross sales, per Item 6 of their latest FDD filings.
Are business services franchises growing or shrinking?
In the latest Item 20 filings, business services systems opened new franchised outlets at an annualized rate of 8.1% while franchisees exited at 8.1%. Exits currently outpace openings in this industry — scrutinize individual systems closely.
What is the healthiest business services franchise?
By the Watch Desk verdict system (computed from FDD Item 20 with an evidence gate), the strongest verified business services system tracked is Website Closers.
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