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Churning is the act of a franchisor taking back a franchise unit in a given location, reselling it, taking it back again, then reselling it again, and so forth. This situation often occurs when the franchisees are not successful at the location. Rather than terminate a poorly producing location, a franchisor can receive multiple franchise fees from the resale of terminated units.
By reselling a failing franchise before it "officially" closes, the franchisor protects itself from having to disclose a franchise failure in the UFOC.
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