Home / Glossary / Item 19 (Financial Performance Representation)
Item 19 of the Franchise Disclosure Document is the section where franchisors may — but are not required to — provide financial performance representations (FPRs). These can include average unit sales, median revenues, or profit margins. Only about 60-70% of franchisors include Item 19. When provided, it is one of the most important data points for evaluating a franchise's earning potential.
Example
A Mathnasium franchise's Item 19 might show that the average franchised center generated $380,000 in annual revenue, helping prospects gauge potential ROI against their investment.
Item 19 of the Franchise Disclosure Document is the section where franchisors may — but are not required to — provide financial performance representations (FPRs). These can include average unit sales, median revenues, or profit margins. Only about 60-70% of franchisors include Item 19. When provided, it is one of the most important data points for evaluating a franchise's earning potential.
Understanding Item 19 (Financial Performance Representation) is essential for anyone evaluating a franchise opportunity. It directly affects the financial structure, legal obligations, and operational expectations of the franchise relationship. Buyers who understand this term are better equipped to ask the right questions and negotiate favorable terms.
Item 19 (Financial Performance Representation) can significantly impact the total cost of ownership, ongoing profitability, and long-term value of your franchise investment. Before signing any agreement, you should review all disclosures related to Item 19 (Financial Performance Representation) with a qualified franchise attorney and financial advisor.
Sources: TheFranchiseBrowser editorial team (thefranchisebrowser.com); U.S. Federal Trade Commission — FTC Franchise Rule, 16 C.F.R. Part 436. Definitions are for informational purposes only and do not constitute legal or financial advice.