What percentage of franchises disclose Item 19 financial data?

Approximately 60% of franchise systems include substantive Item 19 financial performance representations in their FDD. The remaining 40% either leave Item 19 blank or include only a disclaimer stating they do not make financial performance representations.

Can a franchisor show only their best-performing locations in Item 19?

Yes, franchisors have significant discretion in how they present Item 19 data. They can choose to show only certain tiers, regions, or unit types. Always check the footnotes to understand the sample size, what percentage of units are included, and whether any locations were excluded from the data.

Should I avoid a franchise that does not have Item 19?

Not necessarily, but the absence should prompt extra due diligence. Contact at least 10-15 existing franchisees from the Item 20 list and ask about their actual revenue and profitability. If no one is willing to share numbers, that itself is a warning sign.

What is the difference between average and median revenue in Item 19?

The average (mean) can be inflated by a few high-performing outliers, while the median represents the middle unit in the system. As a new franchisee, you are statistically more likely to perform near the median. Always look for median figures when evaluating Item 19 data.

Is Item 19 revenue the same as franchisee profit?

No. Most Item 19 disclosures show gross revenue or sales only. To estimate profit, you need to subtract cost of goods sold, labor, rent, royalties, advertising fees, and other operating expenses. Only a small number of franchisors provide full profit-and-loss data in Item 19.

FDD Item 19 Explained: Franchise Earnings & Revenue Data

What Is Item 19?

Item 19 of the Franchise Disclosure Document is where franchisors may (but are not required to) provide financial performance representations. This can include revenue figures, average unit volumes, cost data, or profitability metrics.

Critical fact: Only about 60% of franchise systems include substantive Item 19 data. The rest either provide a blank Item 19 or include a disclaimer stating they “do not make financial performance representations.”

Why Some Franchisors Don’t Disclose

There are a few reasons a franchisor might skip Item 19:

Poor performance — The numbers don’t help sell franchises
Inconsistent results — Wide variation across units makes disclosure complicated
Legal caution — Fear of lawsuits if actual results don’t match disclosed figures
New system — Not enough data to make meaningful representations

Our take: Well-performing franchise systems have every incentive to disclose. Absence of data is information in itself.

Common Item 19 Formats

Gross Sales/Revenue Only

The most common format. The franchisor discloses average, median, or range of gross sales across the system. This tells you the top line but nothing about profitability.

What’s missing: Cost of goods, labor costs, rent, and all other operating expenses. Revenue alone doesn’t tell you if franchisees are profitable.

Revenue by Quartile or Tier

Better franchisors break down performance by quartiles (top 25%, second 25%, etc.) or by unit age. This helps you understand the distribution rather than just the average.

Look for: The median rather than the average. A few high-performing outliers can inflate the average by a wide margin.

Full P&L Disclosure

The gold standard. Some franchisors provide a full profit-and-loss breakdown including revenue, COGS, labor, rent, and operating profit. This is rare but extremely valuable.

How to Analyze Item 19 Data

Step 1: Check the Sample

How many units are included? What percentage of the system do they represent? Some franchisors cherry-pick top-performing locations.

Step 2: Look at the Median, Not the Mean

If 100 units have an average revenue of $1M, but the median is $700K, that means a few top performers are pulling up the average. You’re more likely to be a median performer.

Step 3: Calculate the Realistic Scenario

Take the median revenue, subtract your estimated costs (use Item 7 and Item 6 data), and see what’s left. This is your realistic pre-tax income.

Step 4: Talk to Actual Franchisees

Item 20 gives you contact information for every franchisee in the system. Call at least 10-15 and ask about their actual financial performance.

What If There’s No Item 19?

If the franchisor doesn’t disclose financial performance:

Ask the franchise sales team why (their answer is revealing)
Contact existing franchisees from the Item 20 list
Research the industry average for similar businesses
Use our industry benchmarks to compare against peers

See Which Franchises Disclose Item 19

Our database tracks which franchise systems include Item 19 data. Browse our franchise library — each listing shows whether Item 19 is available, along with investment ranges, fees, and system size.

Item 19 Explained: How to Read Franchise Earnings Claims

Key Takeaways