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
When a franchisor includes Item 19, read the outlets, time period, and whether the figure is gross sales or profit. Those limits are part of the representation. This site does not restate a brand's sales or owner income unless that Item 19 is quoted with those limits.
Frequently Asked Questions
What is 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.
Why does Item 19 (Financial Performance Representation) matter for franchise buyers?
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.
How does Item 19 (Financial Performance Representation) affect my franchise investment?
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.