Item 19 - FINANCIAL PERFORMANCE REPRESENTATIONS
This section serves as the one and only location in the FDD where the franchisor can make Financial Performance Representations (FPRs), including historical revenue growth, EBITDA/EBITDAR, and other financial results of existing franchisees. While this information is meant to help you identify your potential profitability as a franchisee, franchisors are not required to include an FPR in Item 19 of their FDD.
- Get a better sense of how much money you can make as a franchisee.
- Compare potential revenue to known expenses (Items 5 – 7).
- If the franchisor does not provide an Item 19, they cannot disclose specific franchisee performance results but may present cost and expense data.
- What can you earn from the franchise? Is it reasonable? Is it in line with your goals?