Item 19 covers financial performance representations in a US FDD. Before using any disclosed figure, establish exactly what it measures and which operations contributed to it. Sales, operating profit and an owner’s available cash are different outcomes.
Read the population and period
Identify whether the figures concern all outlets or a defined subset, the trading period and the included formats. Ask why an outlet might be excluded. An average drawn from mature sites may not describe a newly opened location with different rent or customer demand.
Inspect the measure and missing costs
Record whether the number describes revenue, a margin or another result. List costs not included before converting it into an operating scenario. Do not turn a sales figure into personal income by subtracting only the royalty.
Build a question log, not a promised result
Compare the disclosed assumptions with your proposed location and request substantiation through the appropriate process. Refer discrepancies or sales claims outside the document to a qualified US adviser. Where the section makes no performance representation, do not manufacture a network earnings estimate.
A worked research example
Illustrative example: sales of 600,000 tell you nothing definitive about owner cash without operating costs, investment, debt and other commitments. Two outlets with equal sales can have different staffing, occupancy and financing burdens.
Evidence to gather
- Identify the represented financial measure
- Read the sample and exclusions
- List costs omitted from the measure
- Check relevance to the proposed location
Before you move forward
Frequently asked questions
Is an average a forecast for my outlet?
No. It describes the represented data and does not establish your future results.
Does revenue equal owner income?
No. Operating and other cash commitments still need to be considered.
Should I invent an estimate when no earnings data is supplied?
No. Mark the information unavailable and investigate through appropriate evidence and advice.
Sources and scope
References checked 6 November 2026. The questions, examples and diagrams are our editorial research tools; they are not statements that every franchise has the same terms.
- eCFR — 16 CFR 436.5, disclosure items
US federal disclosure-item structure; not a review of a particular offer or all state requirements.
- FTC — A Consumer’s Guide to Buying a Franchise
US franchise buying background; our questions and scenarios are independent editorial tools.
General editorial information, not personalised legal, tax or financial advice. Confirm local requirements and the actual documents with appropriate advisers. Examples are hypothetical. Contact the editor or suggest a correction.
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