Item 19 is the section of the Franchise Disclosure Document that allows a franchisor to share Financial Performance Representations. These are statements or data about the actual or potential financial results of franchised or company owned outlets. A franchisor may choose whether to include Item 19, but if it does, the information must be accurate, based on reasonable assumptions and supported by written substantiation.
Item 19 exists to give prospective franchisees a clear and compliant look at how the business may perform based on historical data or controlled studies.
Item 19 is often one of the most reviewed sections of the Franchise Disclosure Document. Prospective buyers, lenders and advisors rely on Item 19 to evaluate revenue potential, cost structure, margins and overall system performance. A strong and transparent Item 19 can make it easier for franchisors to attract qualified candidates and support lending decisions.
When a franchisor does not provide Item 19 data, candidates must rely on informal discussions with existing franchisees. This often lengthens the sales process and increases uncertainty for buyers.
If a franchisor chooses to make a Financial Performance Representation, it may disclose information such as:
historical gross sales
average or median revenue
year over year revenue data
cost of goods and key operating expenses
net profit or EBITDA
unit level financial summaries
results of controlled tests or pilot programs
performance information for company units
information segmented by geography, tenure or unit type
All numbers must be tied to real data, must be presented fairly and cannot be misleading.
Franchisors must follow strict FTC rules when presenting Item 19 data:
all numbers must be backed by written substantiation
the sample size must be explained
exclusions must be disclosed
time periods must be consistent
franchisees must be able to reasonably duplicate the results
no unauthorized financial promises may be made outside Item 19
Franchisors must also include cautionary language that states that results vary and that individual outcomes depend on multiple factors.
Franchise buyers and advisors rely on Item 19 to evaluate:
potential revenue and profitability
unit level financial consistency across the system
whether top performers are representative or outliers
whether results align with conversations with franchisees
sustainability of the business model
return on investment and expected payback periods
Item 19 often guides candidate qualification and early financial planning.
Buyers typically watch for:
very small sample sizes
limited disclosure that omits struggling units
inconsistent or unusual time periods
high variability among units
disclaimers that appear overly cautious
no disclosure at all despite a mature system
These issues often lead to deeper conversations with existing franchisees.
Item 19 appears after the sections covering fees, obligations and territory rights. It is followed by Item 20, which discloses outlet counts and growth trends, and Item 21, which covers audited financial statements.
Franchisors often choose:
average unit sales
median unit sales
profits after disclosed expenses
high unit sales
low unit sales
revenue ranges
quartile or tiered performance
“top third vs bottom third” comparisons
multi unit owner performance
Item 19 data must generally align with the system’s territory structure (Item 12) to be reasonable.
Franchise Disclosure Document
Item 20
Gross Sales
EBITDA
Franchise Turnover Rate
Franchise Territory Mapping
Integrated E-Sign
CRM Tools (Track and Chart Revenue and Expense Per Territory)
Zapier Integration (Zap Revenue)
Franchise Registration Management
Territory Mapping & Item 19: Why Size Does Matter in Franchise Disclosure
Understanding Item 12 of the Franchise Rule: Territories Explained
Last updated: November 26, 2025
