Franchise Glossary
Churning
What is Churning in franchising?
When a franchisor repeatedly resells a failing franchise location to new buyers, even though the location has a pattern of failure regardless of who owns it. A single territory might be churned through several owners, each paying a fresh franchise fee. You can spot potential churning by studying Item 20 of the FDD, which discloses unit openings, closings, transfers, and terminations over the past three years. If you see the same territory changing hands multiple times, proceed with extreme caution.