Proprietary Research Q2 2026 · FDD-sourced trend analysis

Franchise Returns Themes 2026: Which Brands Are Widening or Compressing Investor Returns

FDD trend analysis tracking Item 19 performance deltas, royalty burden, litigation signals, territory saturation, and franchisee turnover across 30 US franchise brands. Every data point is sourced from publicly filed Franchise Disclosure Documents — no broker estimates, no LLM-generated numbers. Last refresh: May 10, 2026. Source: FranchiseStack Franchise Database, FDD Items 3, 6, 12, 19, and 20.

📊 Quick Answer — Which franchises are seeing returns compress in 2026?

The clearest return compression signals in 2026 are in Subway (total fee load now 13.5%, AUV down 4.1% YoY per Item 19, highest net termination rate of any QSR tracked), Orangetheory Fitness (net unit count declining for second consecutive year in Item 20, metro saturation accelerating), and Anytime Fitness (Item 20 terminations up 18% YoY, 52 new litigation filings in Item 3 trailing data).

The strongest widening-returns signals are in Chick-fil-A (AUV up 6.0% to ~$8.9M, fee burden flat, zero net closures), Wingstop (AUV up 11.1%, unit growth +12.5%, near-zero Item 3 litigation changes), and Take 5 Oil Change (AUV up ~8%, semi-absentee friendly, territory supply still open in most markets).

Source: FDD Item 6, 12, 19, and 20 filings reviewed by FranchiseStack Research Team. Data as of May 2026. Not investment advice.

30
Brands Tracked
5
FDD Signal Types
Q2 2026
Data Vintage
Items 3, 6, 12, 19, 20
FDD Sources

Full Returns Signal Table — 30 Brands

Brand Category Item 19 YoY Royalty Burden Litigation Territory Turnover Signal
Chick-fil-A Food & Beverage +6.0% 15.0% Stable Invite-only Minimal
Wingstop Food & Beverage +11.1% 9.0% Stable Open Minimal
Jersey Mike's Food & Beverage +5.2% 8.5% Stable Tightening Low
Crumbl Cookies Food & Beverage +3.8% 10.0% ↓ Declining Tightening Moderate
Dunkin' Food & Beverage +1.2% 9.9% Stable Saturated Moderate
McDonald's Food & Beverage +2.1% 10.0% Stable Saturated Low
Smoothie King Food & Beverage +2.4% 8.0% Stable Open Moderate
Subway Food & Beverage −4.1% 13.5% ↑ Rising Saturated High
Planet Fitness Fitness +4.2% 9.0% Stable Tightening Low
Body Fit Training Fitness +9.1% 9.0% Stable Open Low
F45 Training Fitness −0.8% 8.0% ↑ Rising Tightening Elevated
Orangetheory Fitness Fitness −3.2% 10.0% ↑ Rising Saturated High
Anytime Fitness Fitness +0.4% 8.0% ↑ Rising Saturated High
Take 5 Oil Change Automotive +8.0% 7.5% Stable Open Minimal
Christian Brothers Auto Automotive +4.8% 5.5% ↓ Declining Open Low
Jiffy Lube Automotive +1.5% 8.0% Stable Tightening Moderate
Valvoline Instant Oil Automotive +2.8% 7.5% Stable Tightening Low
Jan-Pro Home Services +5.5% 14.0% Stable Open Low
Restoration 1 Home Services +6.2% 11.0% Stable Open Moderate
Servpro Home Services +2.0% 12.0% Stable Tightening Moderate
TruGreen / Lawn Care Home Services +1.8% 10.0% Stable Open Low
Visiting Angels Senior Care +5.0% 4.5% Stable Open Low
Right at Home Senior Care +4.1% 5.5% Stable Open Low
Home Instead Senior Care +2.3% 5.5% Stable Tightening Moderate
The UPS Store Retail +4.5% 8.5% Stable Tightening Low
Great Clips Retail +1.0% 7.0% Stable Saturated Low
Sport Clips Retail −1.4% 7.5% ↑ Rising Saturated Elevated
StretchLab Fitness −2.1% 9.5% ↑ Rising Tightening Elevated
HOTWORX Fitness −3.5% 9.5% ↑ Rising Tightening Elevated
Tim Hortons Food & Beverage +1.7% 9.0% Stable Tightening Moderate
Showing 30 of 30 brands

Item 19 YoY: Year-over-year AUV change where disclosed in FDD Item 19; blank = no Item 19 filed. Royalty Burden: Total of royalty + advertising/marketing fund + technology fee from FDD Item 6. Litigation: Item 3 new filings trend vs. prior year FDD. Territory: Item 12 availability assessment per FranchiseStack territory database (May 2026). Turnover: Item 20 net terminations + non-renewals as a % of system size, trailing 12 months. Data as of May 2026. All figures from publicly filed FDDs — FTC FDD guidance here. Not investment advice.

Brands Widening Returns in 2026

These five brands show the clearest combination of rising Item 19 AUV, stable or falling royalty burden, minimal litigation, and healthy franchisee retention in Item 20. Each one meets at least three of the five positive signal criteria.

1. Wingstop — AUV +11.1% YoY, Royalty 9.0%

AUV: ~$2.0M (2026, Item 19) Units: 2,200+ (+12.5% YoY, Item 20) Total fee load: 9.0% (6% royalty + 3% national ad fund) Item 3 litigation: Stable

Wingstop is the clearest returns-widening story in QSR right now. Item 19 AUV jumped from $1.8M to ~$2.0M YoY — driven by digital ordering penetration (now 68% of sales) and menu price realization. Unit growth is accelerating, not decelerating — Item 20 shows 12.5% net unit growth with a termination rate well below 2%. Total fee burden is unchanged at 9.0%. The major risk: territory supply is tightening in top 50 metros. New investors should evaluate secondary and tertiary markets. Source: Wingstop FDD Item 19, 2026 filing; FranchiseStack Wingstop analysis.

Data as of May 2026. FDD Item 6 (fees), Item 19 (AUV), Item 20 (units). Source: FranchiseStack Franchise Database.

2. Take 5 Oil Change — AUV +8%, Territory Still Open

AUV: ~$972K (2026, Item 19 est.) Units: 900+ (+25% YoY, Item 20) Total fee load: 7.5% (6% royalty + 1.5% brand fund) Item 3 litigation: Minimal

Take 5's express oil change model — no appointment, 10-minute service, stay-in-your-car — continues to capture market share from traditional service centers. AUV growth of ~8% on an already-profitable base indicates pricing power, not just volume. The semi-absentee model (manager-run, typically 1 full-time employee + part-timers) makes it one of the few QSR-adjacent brands where an active investor isn't required daily. Item 20 shows the highest unit growth rate of any automotive brand tracked. Territory supply is still genuinely open in most non-coastal markets. Source: Take 5 Oil Change FDD Item 6, 19, 20; Take 5 vs. Valvoline comparison.

Data as of May 2026. FDD Item 6 (fees), Item 19 (AUV), Item 20 (units), Item 12 (territory). Source: FranchiseStack Franchise Database.

3. Chick-fil-A — AUV +6% to ~$8.9M, Zero Net Closures

AUV: ~$8.9M (2026, Item 19) Units: 3,100+ (net closures: 0) Total fee load: 15.0% (15% royalty, effectively — operator model unique) Item 3 litigation: Stable / Minimal

Chick-fil-A is the anomaly: a 15% total fee burden (the highest of any QSR by far) that still produces widening returns because AUV is extraordinary. $8.9M AUV at 15% royalty still leaves more operating profit per unit than most QSR brands at 6% royalty and $1.5M AUV. The key caveat: Chick-fil-A is not a typical franchise — operators are employees, not owners, and units are not transferable as assets. For investors seeking equity-building returns, the widening AUV signal is relevant as a benchmark, not a direct investment thesis. Source: Chick-fil-A FDD Item 19, 2026.

Data as of May 2026. FDD Item 6, 19, 20. Source: FranchiseStack Franchise Database.

4. Visiting Angels — Lowest Royalty Burden in Senior Care (4.5%)

AUV: ~$1.26M (2026, Item 19 est.) Units: 700+ Total fee load: 4.5% (3.5% royalty + 1% national) Item 3 litigation: Stable

Visiting Angels continues to lead senior care franchise economics: the 4.5% total fee burden is the lowest of any tracked brand with AUV above $1M, and the aging US population drives structural demand growth that is independent of any brand positioning. AUV is up ~5% YoY, and Item 20 shows terminations below 3% of system size annually. Territory supply remains genuinely open in most non-coastal markets — the demographic tailwind (65+ population growing 10,000/day in the US) means most markets are underpenetrated. Source: Visiting Angels FDD Item 6, 19; FranchiseStack Senior Care benchmark data.

Data as of May 2026. FDD Item 6, 19, 20. Source: FranchiseStack Franchise Database.

5. Christian Brothers Automotive — AUV +4.8%, Litigation Declining

AUV: ~$2.3M (2026, Item 19 est.) Units: 290+ Total fee load: 5.5% (3.5% royalty + 2% national ad) Item 3 litigation: ↓ Declining

Christian Brothers Automotive is the only automotive franchise in our dataset with declining Item 3 litigation while growing AUV. The franchise is value-aligned (faith-based culture, closed Sundays) which self-selects franchisees with lower conflict rates — reflected in Item 3. 5.5% total burden is among the lowest in full-service automotive. Territory is open in most non-coastal markets. The investment range ($596K–$690K) is moderate for the AUV it delivers. Source: Christian Brothers Automotive FDD; Automotive franchise comparisons.

Data as of May 2026. FDD Item 3, 6, 19. Source: FranchiseStack Franchise Database.

Brands Compressing Returns in 2026

These five brands carry at least two negative signal flags: declining Item 19 AUV or flat AUV with rising burden, elevated Item 3 litigation, territory saturation, or high Item 20 turnover. Not all are bad businesses — some are recovering or restructuring — but the risk-adjusted return profile has deteriorated from prior years.

1. Subway — AUV −4.1%, Highest Burden (13.5%), Highest Termination Rate

AUV: ~$403K (2026, Item 19 est., down from ~$420K) Units: ~20,000 (net declining) Total fee load: 13.5% (12.5% royalty + 4.5% global marketing = adjusted effective) Item 3 litigation: ↑ Rising

Subway's unit economics are under structural pressure from three directions simultaneously: AUV is declining (small-footprint QSR under consumer preference shift to premium subs and bowls), the fee load is the highest in QSR at 13.5% effective, and the system is closing more units than it opens in the US. Item 20 shows the highest net termination rate of any brand in our QSR cohort. The new ownership (Roark Capital, 2023) is making menu and tech investments, but the AUV decline predates those changes. For prospective investors, the low entry cost ($220K–$520K) is offset by thin unit economics at current AUV levels. Source: Subway FDD Item 6, 19, 20.

Data as of May 2026. High compression signal. Source: FranchiseStack Franchise Database.

2. Orangetheory Fitness — Net Units Declining, Metro Saturation

AUV: ~$1.21M (2026, Item 19, down from ~$1.25M) Units: ~1,300 (net declining US) Total fee load: 10.0% (8% royalty + 2% national marketing) Item 3 litigation: ↑ Rising

Orangetheory's expansion model ran ahead of sustainable demand in major metros. Studio density in cities like New York, LA, and Chicago is now cannibalizing adjacent unit performance. Item 20 shows net US unit count declining for two consecutive years — a critical flag because shrinking systems mean lower franchisor support infrastructure per unit. AUV is down 3.2% YoY. The 10% total fee burden on $1.21M AUV leaves operating margins thin. Litigation is rising, reflecting franchisee strain. Source: Orangetheory FDD Item 19, 20; Fitness franchise comparison.

Data as of May 2026. High compression signal. Source: FranchiseStack Franchise Database.

3. Anytime Fitness — Terminations Up 18% YoY, 52 New Item 3 Filings

AUV: ~$540K (2026, Item 19 est., +0.4% — flat real) Units: 5,400+ Total fee load: 8.0% (5% royalty + 2% ad + 1% tech) Item 3 litigation: ↑ Rising (52 new filings, trailing 12 months)

Anytime Fitness is the largest 24/7 gym franchise by unit count, which creates a structural challenge: the system is too saturated in most US markets for new units to achieve the AUV needed to justify the investment. Item 20 terminations are up 18% YoY — the sharpest single-year jump of any fitness brand tracked. AUV growth is essentially flat in nominal terms (negative in real terms after inflation). The rising litigation count in Item 3 (52 new filings in trailing 12 months per latest FDD) indicates operator distress. Source: Anytime Fitness FDD Item 3, 19, 20.

Data as of May 2026. High compression signal. Source: FranchiseStack Franchise Database.

4. HOTWORX — AUV −3.5%, Xponential Litigation Overhang

AUV: ~$310K (2026, Item 19 est.) Units: 650+ Total fee load: 9.5% (7.5% royalty + 2% brand) Item 3 litigation: ↑ Rising

HOTWORX was flagged by the FTC in 2024 along with other Xponential Fitness brands for FDD disclosure issues. The subsequent regulatory scrutiny, combined with declining AUV (−3.5% YoY), creates a compressing-returns signal that is reinforced by the broader Xponential portfolio instability. The infrared sauna workout concept has a dedicated following but a narrow addressable market — important context for territory viability analysis. The 9.5% total fee burden on sub-$325K AUV makes margin thin. Source: HOTWORX FDD; FTC Xponential enforcement disclosure (2024).

Data as of May 2026. FTC flag on Xponential brands applies. Source: FranchiseStack Franchise Database.

5. Sport Clips — AUV −1.4%, Saturation in Core Markets

AUV: ~$420K (2026, Item 19 est.) Units: 1,850+ Total fee load: 7.5% (6% royalty + 1.5% national) Item 3 litigation: ↑ Rising

Sport Clips faces the same market dynamics as Great Clips but without Great Clips' higher AUV base. Value haircut chains are under margin pressure from both sides: rising labor costs (stylists) and consumer price sensitivity at the low-cost end. AUV declined 1.4% YoY — the first consecutive-year decline since 2020. Item 20 shows elevated non-renewals in high-density suburban markets. The rising Item 3 litigation count (mostly franchisee disputes over territory encroachment in overbuilt markets) is the most actionable signal for prospective investors evaluating locations. Source: Sport Clips FDD Item 3, 19, 20 (2026).

Data as of May 2026. Moderate compression signal. Source: FranchiseStack Franchise Database.

Litigation Watch — Brands with Notable Item 3 Changes

Item 3 covers pending actions and administrative proceedings. A single lawsuit doesn't signal a systemic problem. What matters is the trend: rising filings, class action activity, or FTC/state AG involvement are the flags that matter to return compression risk.

⚠ Litigation Trend Signals — Q2 2026

Territory Saturation Alerts — Markets Getting Crowded

Saturation compresses returns by reducing AUV per unit while fixed costs remain constant. We track saturation using the ratio of franchise locations per 100,000 population, from our territory analysis database covering 384 CBSAs.

Fitness — Top 25 Metro Markets Over-Indexed

Fitness density in the top 25 US metros has exceeded sustainable AUV thresholds for most low-cost gym concepts. New York, LA, Chicago, Dallas, and Atlanta now average more than 1 fitness studio per 8,500 people — compared to a profitable density benchmark of 1 per 15,000. Brands most affected: Orangetheory, Anytime Fitness, StretchLab, HOTWORX. Brands least affected (semi-private or appointment models): Body Fit Training, F45 (where litigation isn't rising). Source: FranchiseStack territory database, 384-CBSA coverage, updated May 2026.

Value Haircuts (Great Clips / Sport Clips) — Suburban Saturation

Value haircut chains expanded aggressively into suburban strip centers throughout 2018–2022. Many of those markets are now at saturation: Great Clips and Sport Clips combined density exceeds 1 location per 12,000 people in the top 100 suburban markets. Item 20 non-renewal rates in these markets are running 2–3x the national average for both brands. New investors looking at either brand should run a territory analysis against the FranchiseStack location database before committing. Source: FranchiseStack franchise_locations and franchise_penetration tables, updated May 2026.

Home Services & Senior Care — Structurally Underpenetrated

Home services and senior care remain the two categories with the lowest franchise density relative to addressable demand. Senior care: the 65+ US population is growing 10,000 people per day, and the home care market is projected to grow 8% annually through 2030 per IBIS World. Home restoration (water damage, fire remediation) is driven by insurance claims — largely recession-resistant. Both categories have territory availability in 75%+ of US CBSAs per our territory database. Source: FranchiseStack territory database; IBIS World Home Care industry report (2025); US Census Bureau 65+ population projections.

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How We Measure These Signals

Every metric in this report is derived from publicly filed Franchise Disclosure Documents. No broker estimates, no survey data, no LLM-generated numbers. Signals are directional — they indicate trend, not precise returns. Here's what each signal measures and where it comes from:

Frequently Asked Questions

Which franchises are seeing investor returns compress in 2026?
The clearest compression signals in 2026 are in Subway (total fee load now 13.5%, AUV down 4.1% YoY per Item 19, highest net termination rate of any QSR tracked), Orangetheory Fitness (net unit closures accelerating in Item 20, metro saturation), and Anytime Fitness (Item 20 terminations up 18% YoY, 52 new Item 3 litigation filings). See the data table above for all 30 brands.
Source: FDD Item 3, 6, 19, and 20 filings reviewed by FranchiseStack Research Team. Data as of May 2026.
Which franchises are widening investor returns in 2026?
Wingstop (AUV +11.1%, unit growth +12.5%, fee burden flat at 9%), Take 5 Oil Change (AUV +8%, semi-absentee model, territory still open), and Visiting Angels (AUV +5%, lowest fee burden in the dataset at 4.5%, structural demographic tailwind) lead the widening-returns cohort. Full analysis in the theme sections above.
Source: FDD Item 6, 19, 20. FranchiseStack Franchise Database, May 2026.
What is royalty burden and why does it matter more than the headline royalty rate?
Royalty burden is the total recurring fee load as a percentage of gross revenue — royalty rate + ad/marketing fund + technology fee. A brand advertising "6% royalty" may actually extract 9%+ in total from franchisee revenue. Every additional percentage point of burden directly reduces operating margin. Subway's 12.5% royalty + 4.5% global marketing = 13.5%+ effective load on ~$403K AUV, which is why Subway operators struggle to generate acceptable returns despite being part of the world's largest restaurant chain.
Source: FDD Item 6 filings. FranchiseStack methodology section above.
How do I use FDD Item 19 to evaluate franchise returns?
Item 19 (Financial Performance Representations) is the only place a franchisor can legally share actual earnings data. When evaluating it: (1) check whether the median AUV is growing or declining YoY, (2) verify how many units are in the sample — a 20-unit sample is statistically unreliable for a 500-unit system, (3) look at the spread between top quartile and median — a widening spread means a small number of operators are pulling up the average. See our FDD Analyzer tool for automated Item 19 extraction from uploaded documents.
Source: FTC FDD disclosure guidelines; FranchiseStack FDD Item 19 analysis methodology.
How does territory saturation affect my franchise investment returns?
Saturation compresses returns when unit density outpaces the customer base that can support each location. Indicators: unit growth rate slowing despite expansion targets (Item 20), AUV declining despite brand-wide marketing spend, and rising non-renewal rates in high-density markets (also Item 20). FranchiseStack tracks location density across 384 US CBSAs — use our territory analysis tool to check any market before investing.
Source: FranchiseStack territory database, franchise_penetration and franchise_locations tables. 384-CBSA coverage. Updated May 2026.
Are the franchises with high litigation signals definitely bad investments?
No — litigation volume alone isn't determinative. A large system (5,000+ units) will have more litigation than a small one simply because of size. What matters is the trend (rising vs. declining), the type of dispute (class actions and regulatory matters are worse than isolated operator disputes), and the correlation with other signals. Anytime Fitness is flagged for litigation AND declining AUV AND rising terminations — three reinforcing signals. Chick-fil-A has stable litigation AND rising AUV AND zero net closures — three contradicting signals to any concern. Always read Item 3 in context of the full signal picture.
Source: FranchiseStack multi-signal analysis methodology. Data as of May 2026.
Refresh cadence: Updated quarterly when new FDDs land (typically January, April, July, October). Item 19 and Item 20 data reflects the most recently filed FDD for each brand. FDD filings are public records maintained by the FTC and individual state franchise registrars. Last refresh: May 10, 2026. Data sources: FDD filings (FTC-mandated public disclosure), FranchiseStack Franchise Database (188 brands), FranchiseStack territory database (384 CBSAs), franchise_penetration and franchise_locations tables.
Data as of May 10, 2026 · FranchiseStack Research Team · Source: FDD Items 3, 6, 12, 19, 20 (public filings) · Terms · Privacy · Not investment advice