Item 19: The Financial Performance Data That Can Make or Break Your Decision

What Is Item 19?

Item 19 is one of the 23 required items in every Franchise Disclosure Document (FDD). It is titled "Financial Performance Representations" and is the only place a franchisor can legally share financial data about how its franchise locations actually perform.

Here is the key detail most people miss: Item 19 is optional. The FTC requires every franchisor to include an Item 19 section, but the franchisor can choose to leave it blank with a statement saying it does not make financial performance representations. There is no penalty for leaving it out.

When a franchisor does include financial data in Item 19, every number must be accurate and substantiated. The franchisor cannot make claims it cannot back up with real data. That is why Item 19, when present, is one of the most reliable sources of financial information you will find during your research.

What Kind of Data Appears in Item 19?

There is no single required format for Item 19. Different franchisors present their data differently, which can make comparisons tricky. Common formats include:

Revenue data. Many franchisors show gross revenue figures — averages, medians, or ranges broken down by location type, geography, or years in operation. This tells you how much money comes in the door but says nothing about what goes out.

Expense breakdowns. Some franchisors go further and show cost categories like labor, rent, cost of goods, and marketing. This is more useful because it helps you estimate what you might actually keep after expenses.

Profit or earnings data. A smaller number of franchisors share bottom-line figures like net income, EBITDA, or owner earnings. This is the gold standard of Item 19 disclosures because it gives you the closest look at what a franchisee actually takes home.

Cohort breakdowns. The best Item 19s break results down by meaningful groups — top quartile vs. bottom quartile, year one vs. year three, urban vs. suburban. This helps you understand the range of outcomes rather than just an average that might be skewed by a few outliers.

Why Some Franchisors Skip Item 19

Roughly 40% of franchisors choose not to include financial performance data in Item 19. There are several reasons why:

Legal caution. Any number in Item 19 must be defensible. If a franchisor's data is inconsistent across locations or hard to verify, the legal team may advise against including it to avoid potential misrepresentation claims.

New or small systems. A franchisor with only a handful of locations may not have enough data to present a meaningful picture. A three-location average does not tell you much.

Weak results. Sometimes the simplest explanation is the right one — the numbers are not impressive enough to share. This is not always the case, but it is worth considering.

Competitive concerns. Some franchisors worry that detailed financial data could be used by competitors. This is a legitimate concern, though many franchise consultants argue that the benefits of transparency outweigh the risks.

If a franchisor you are evaluating does not include Item 19, do not panic. But do ask why, and make sure to talk to existing franchisees about their experience. The franchisor cannot legally tell you what to expect financially outside of Item 19, but franchisees can share their own results with you directly.

How to Read Item 19 Like a Pro

Even when Item 19 is present, you need to read it carefully. Here are the questions to ask:

Is this revenue or profit? A location doing $800,000 in revenue might be losing money if expenses run $850,000. Always look at what category of data is being presented and whether expenses are accounted for.

What is the sample size? Are these results from 200 locations or 12? Small samples can be misleading. Look for footnotes that explain how many locations are included and whether any were excluded.

Are outliers skewing the average? One location doing exceptionally well can pull up an average significantly. Medians are often more useful than averages. If the franchisor shows both, compare them — a big gap between average and median means the data is skewed.

What time period is covered? Some Item 19s show a single year of data. Others show trends over multiple years. Multi-year data is more useful because it shows whether the system is growing or declining.

Does this match what franchisees tell you? Item 19 data should be consistent with what you hear during your validation calls with existing franchisees. If the numbers look great on paper but franchisees sound frustrated, dig deeper.

Item 19 and Pet Service Franchises

In the pet services industry — which has grown past $157 billion in the U.S. — Item 19 data can be especially telling. Pet service businesses like dog training, grooming, and daycare often feature recurring revenue models where clients return week after week. This creates more predictable revenue patterns than one-time transaction businesses.

When reviewing Item 19 for a pet service franchise, look for data on customer retention rates, average revenue per client, and revenue ramp-up timelines for new locations. These metrics matter more than a single revenue number because they show whether the business model creates lasting customer relationships.

Zoom Room includes an Item 19 in its FDD. To review the specific financial performance data and ask questions about what the numbers mean for your market, request information to begin the discovery process and receive the current Franchise Disclosure Document.