Item 19 is often called the most valuable section of the Franchise Disclosure Document — and for good reason. It's the only place where a franchisor can legally share financial performance data like revenue, gross profit, or net income with prospective franchisees.
What Item 19 Includes
When a franchisor chooses to disclose Item 19, the content varies widely. Some provide detailed breakdowns including median and average gross revenue, cost of goods sold, labor costs, and owner earnings. Others share only a single top-line revenue figure. There's no standard format, which is why comparing Item 19 data across brands requires careful normalization.
Why Some Franchisors Skip Item 19
Disclosure is optional. Roughly 30-40% of franchisors choose not to include any financial performance data. The reasons vary: some worry about liability if actual results fall short of disclosed figures, while others simply prefer not to share numbers that might look unfavorable. The absence of Item 19 isn't necessarily a red flag, but it does mean you'll need to do more independent research.
How to Interpret the Numbers
When reading Item 19, pay attention to several factors:
- Median vs. average: Averages can be skewed by a few high-performing locations. Median revenue gives a more realistic picture of what a typical franchisee earns.
- Cohort definitions: Some franchisors report data only for mature units or top-performing locations. Check the footnotes to understand who's included.
- Revenue vs. profit: Gross revenue alone doesn't tell you much about profitability. Look for cost data or use industry benchmarks to estimate margins.
Franchise Breakdown extracts and normalizes Item 19 data across hundreds of franchises, making it easy to compare financial performance across brands and categories. Every franchise report flags whether Item 19 data is available and presents it in a consistent format. See which brands lead on profitability in our most profitable franchises ranking.