How the Franchise Transparency Score works

Why we grade transparency, not profit

Everyone evaluates a franchise by profitability. It is the first thing buyers search for and the first thing brochures answer. But profit is a single number a franchisor chooses to disclose, on its own terms, and roughly 40% of franchisors disclose no financial performance at all. A profit figure does not transfer from one owner to the next, and it is silent on the things that actually sink owners: undisclosed costs, a wall of franchisee litigation, owners quitting in numbers, vague support, an unprotected territory, and contracts that hand the franchisor total control.

So we grade what predicts your risk: how openly the franchisor discloses each of those areas. Strong transparency is not a promise that you will succeed. But weak transparency is a reliable warning, and it is one you can measure before you sign.

The seven factors and their weights

Each factor is scored 0 to 10 for how clearly and completely the franchisor discloses that FDD section. The sub-scores are weighted and summed into a single 0 to 100 grade. The weights are locked; changing them re-versions the methodology.

Weights sum to 100. See the full factor definitions and scoring on the Score & Rubric page.

The grade bands

The headline is a whole-number 0 to 100 grade, reported in five bands. No false decimals: a defensible grade should not pretend to a precision the inputs do not support.

How Item 19 earnings data is handled

If a franchisor discloses an Item 19 Financial Performance Representation, we may report those figures, verbatim and attributed, with the franchisor's own disclaimers intact. We never roll them into the score, never average or re-rank them, and never project them forward. The earnings disclosure is shown alongside the transparency grade, never inside it. Full detail: How we use Item 19.

Reproducibility and limits

The same answers about an FDD always produce the same grade. The instant tool grades your reading of the disclosure; its completeness depends on how much of the FDD you have and have read. A deeper, human evaluation from Mike reads the full document directly. Either way, the grade is a measure of disclosure quality, not a prediction of your results.