Every spring, franchisors across the country find themselves in the same stressful routine: rushing to finalize their Franchise Disclosure Document (FDD). And for many, Item 20—which details every outlet opening, closure, transfer, and renewal—becomes a last-minute scramble.
But here’s the truth: waiting until March or April to assemble that data isn’t just inconvenient. It’s risky.
When you delay tracking outlet data until FDD renewal season, you expose your brand to compliance errors, higher legal costs, and potential misrepresentation claims. You also miss the opportunity to use that data proactively—for system growth, territory analysis, and better franchisee relations.
If you’re still relying on spreadsheets, email threads, or outdated CRMs to manage franchise activity, it’s time to modernize your process. Accurate, territory-level tracking isn’t optional—it’s essential.
That’s where Zors, the franchise intelligence platform built for compliance and growth, comes in. 🚀
💡 Item 20 of the FTC’s Franchise Rule requires franchisors to disclose detailed, year-over-year outlet activity, including:
The number of outlets opened and closed
Transfers and terminations
Non-renewals and reacquisitions
The reason for each closure
The number of signed but not-yet-opened agreements
This information doesn’t just satisfy regulators—it informs every prospective franchisee’s buying decision. Item 20 shows whether your system is stable, expanding, or contracting.
⚠️ Misreporting or omitting this data, even unintentionally, can trigger:
State or federal enforcement actions
Franchisee claims of misrepresentation
Damaged trust with candidates and brokers
Reputational harm that lingers far beyond renewal season
Too often, franchisors don’t start gathering Item 20 data until the FDD deadline looms. By that point:
Records are incomplete or missing
Key staff who managed openings have moved on
Open and close dates don’t line up across departments
Closure reasons were never documented
Disputes arise over whether a unit was “terminated” or “ceased operations for other reasons"
The result? Frantic data reconstruction, late nights, and rushed disclosures. Even worse, small inaccuracies can snowball into material misstatements. These problems go far beyond inconvenience. It’s not just about missing a few dates or having to double-check spreadsheets—reporting errors can cause structural inconsistencies that ripple through the entire FDD.
Once even a single record is off, it can throw multiple sections out of alignment:
đź’ˇ For example:
Recording the wrong opening date can cause major downstream issues. If you mark a franchise as “open” before it actually begins operations, your Item 19 financial performance data becomes skewed because the outlet count used in the measurement period is inflated. That same error then rolls into Item 20, overstating the number of active units at year-end. The following year, the discrepancy reverses - while Item 20 would suggest the outlet was open for the entire prior year - you wouldn't have any financials to support that claim. Over time, this kind of mistake distorts your growth narrative and financial averages. **Failing to log a transfer or reacquisition creates another form of misalignment. If a location changes hands or is bought back by the franchisor but the change isn’t recorded, your total number of operating outlets appears higher than it really is, and the “reason for closure” data in Item 20 becomes incomplete. Regulators may view these omissions as material—especially if a franchisee termination or reacquisition affects financial representations or system health disclosures. This can lead to a blackout period when you catch the error, problems on renewals, or worse.
These inconsistencies don’t just look sloppy—they can undermine your credibility with regulators, attorneys, and prospective franchisees who are analyzing your system’s stability.
đź“Ť In registration states like New York or Maryland, the issue becomes even more serious. A missing or misclassified transaction could mean an entire sale goes undisclosed, triggering state enforcement actions or fines. In some cases, the franchisor may even have to rescind a franchise sale or amend their registration.
And once the errors are discovered, correcting them isn’t quick. Backtracking data to locate missing open and close dates can take weeks or months—especially if key personnel have left, files are stored across multiple systems, or documents were never centralized in the first place. Teams often end up:
Searching archived inboxes for confirmation emails
Reviewing old Franchise Agreements or addenda to verify open dates
Calling franchisees for clarification
Reconciling outdated spreadsheets against current CRM data
Amending their FDD
Each of these tasks adds up. What should be a straightforward reporting process turns into an expensive, time-consuming internal audit—often right when you’re racing to meet renewal deadlines - or worse, after being issued a registration permit.
In short, poor data discipline doesn’t just slow you down—it increases your legal exposure and eats away at your team’s capacity to focus on growth.
Most CRMs are built for general business use — managing leads, customers, or sales pipelines — not for the highly regulated and deadline-driven world of franchising. As a result, franchisors often resort to building their own compliance tracking systems using Excel sheets, shared folders, or disjointed notes across different departments. Over time, these spreadsheets go stale, get lost, or fail to reflect real-time data from the field. That creates unnecessary risk — especially when key milestones like franchise renewals, disclosure updates, or territory filings aren’t tracked consistently across the organization.
Zors was built specifically for franchisors who are ready to take compliance seriously and stay audit-ready year-round. By bringing every compliance element into a single, unified system, Zors replaces the patchwork of spreadsheets and manual checklists with purpose-built dashboards and discrete tracking tabs for each data set. This structure allows franchisors to make compliance a seamless part of their operational workflow — updating, reviewing, and verifying information as part of their routine, rather than scrambling for it once a year during renewal season.
Because we combine territory mapping, CRM tools, and compliance workflows into one platform, each location in Zors is tied to a specific territory, franchisee, and company record. You can easily record and monitor:
Opening dates
Closure dates
Transfer or resale activity
Renewal deadlines
No more digging through contract folders or searching old emails for details. All data is centralized, searchable, and exportable—ready for your FDD or internal reports anytime.
Its much easier to keep good records in the moment.
Zors mirrors the official Item 20 closure classifications, ensuring your data aligns perfectly with disclosure requirements:
Transferred
Terminated
Non-renewed
Reacquired by franchisor
Ceased operations (other reasons)
This structure simplifies annual reporting and creates a transparent, defensible record for regulators and franchisees alike.
From initial sale to renewal, Zors gives you a real-time snapshot of your system’s activity. Visual dashboards show:
Territories sold but not yet opened
Units approaching renewal
Areas at higher risk of closure
Growth trends by territory
This helps your team make data-driven decisions—whether to expand, consolidate, or adjust support levels.
By the time renewal season hits, your Item 20 data should already be accurate, current, and defensible. With Zors, it is.
đź“Ť No last-minute scrambles
đź“Ť No missing dates or closure reasons
đź“Ť No regulatory headaches
Instead, you’ll have a live, transparent record that can be exported to your FDD template in seconds—saving time, reducing legal costs, and strengthening credibility with candidates.
Accurate Item 20 reporting isn’t just about staying out of trouble—it’s about building trust.
Prospective franchisees want to know they’re joining a system that tracks performance, learns from challenges, and communicates openly. When your data is clean, consistent, and verifiable, it speaks volumes about your operational integrity.
With Zors, that transparency becomes effortless.
If you’re a franchisor who wants to stay compliant, reduce legal risk, and gain full visibility over your network, Zors is your year-round solution.
Real-time outlet tracking.
Territory-based insights.
Audit-ready reports.
💡 Avoid the Item 20 scramble—start tracking smarter. Features like those described in this blog are exactly what makes Zors the best franchise CRM software.
🛑 Disclaimer:
The information provided in this blog post is for general informational purposes only and is not legal advice or a substitute for consulting with a qualified attorney. Franchise law is complex and highly nuanced, governed by both federal regulations and varying state-specific laws. Proper legal guidance requires a detailed understanding of these rules as applied to your specific circumstances. You should not act—or refrain from acting—based on anything in this post. You should consult your franchise attorney for legal advice.
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