Buying a franchise can feel exciting — a recognizable brand, proven systems, and the promise of “turnkey” success. But here’s the truth:

Not all franchises make money, and not all franchisees succeed.

If you want to know whether a franchise is worth it, you need to understand one part of the Franchise Disclosure Document (FDD): Item 19.

Don’t worry — you don’t need an MBA to make sense of it. Item 19 is simply the section where the franchisor shares real numbers from their existing franchisees. Think of it as a “report card” for how stores perform.

What Item 19 Shows

Item 19 may include:

• How much money stores bring in (sales)
• Average performance of franchisees
• How the top stores compare to the bottom ones
• Sometimes profits or expenses

Important: Not every franchisor provides Item 19. If it’s missing, they cannot legally make claims about earnings outside the FDD.

This section is your best tool to figure out if the business can make money for someone like you.

Step 1: Don’t Just Look at “Average Sales”

A number like:

“Average Sales: $1,200,000”

might look great — but averages can be misleading.

Ask:

• What’s the middle number (median)?
• How many stores are included?
• Are these company-owned or franchised?
• How long have these stores been open?

For example, if one store made $3 million and most made $900K, the average is skewed. The middle number gives a more realistic picture.

Step 2: Remember — Sales ≠ Profit

Just because a store brings in money doesn’t mean you get to keep it all. You have to pay:

• Rent, utilities, and staff
• Supplies and inventory
• Loan payments, if you borrowed money

What matters is what’s left over for you — your real earnings.

Step 3: Look at the Range of Results

Item 19 often shows how stores are performing across the board: top, middle, and bottom performers.

This tells you two important things:

• How much a store’s performance depends on the owner
• What you can realistically expect if you’re just starting

If the top third makes twice as much as the bottom third, your effort and skill will matter — but you can still see what the “average” store looks like.

Step 4: Check How Many Stores Are Included

Sometimes Item 19 only shows numbers from a fraction of stores. For example:

“Data based on 35 of 120 locations open 2+ years.”

Ask:

• Why only 35?
• What happened to the others?

This helps you avoid surprises.

Step 5: Talk to Current Franchisees

Numbers tell part of the story. Talking to real franchisees tells the rest. Ask:

• Are these numbers realistic?
• How long did it take to start making money?
• What unexpected costs came up?
• Would you do anything differently?

Item 20 of the FDD gives you their names — don’t skip this step.

Step 6: Understand How Long It Takes to Make Money

ROI isn’t just about how much — it’s about how quickly you see a return.

Ask:

• When do most franchisees cover their startup costs?
• When can you start paying yourself a salary?
• How long until the business fully pays for itself?

Some franchises ramp up fast; others take patience.

Step 7: Look for Clear Information

A good Item 19:

• Explains numbers in plain language
• Shows exactly what’s included
• Avoids confusing terms

If the FDD is vague, that’s a warning sign.

Common Mistakes New Owners Make

❌ Focusing only on sales numbers
❌ Ignoring ongoing expenses
❌ Assuming you’ll perform like the top stores
❌ Forgetting about startup costs and working capital

Understanding Item 19 helps you see the realistic money picture — not just the “hype.”

Want Help Making Sense of Item 19?

If you’re new to business or not comfortable with numbers, it’s easy to get lost in the FDD.

I can help you figure out:

• What costs to plan for
• Whether this franchise fits your goals

Don’t guess — schedule a consultation today and make sure the franchise works for you before you invest.