For those of you who have been following us along, we're going back to the Franchise Disclosure Document (FDD) and we're covering the granddaddy of all the Items (of the FDD), which is Item 19. We're gonna learn what is Item 19, and why is it important and give you some advice on how to follow up on Item 19 if you're evaluating a franchise.
What is Item 19 from a 10,000-foot view?
Item 19, it's the biggie, it's the big kahuna. Item 19 is financial performance representations. And this answers the question that every single candidate asks us, which is, how much money can I make? Item 19 directly covers the revenue side of the equation.
Why Item 19, it’s essential that you understand what it is, where it is, and what it means.
So when a candidate starts looking at Item 19 of the FDD, the financial representations, here's the thing, every single franchise that you look at this is going to be presented differently. There's no one set format for how to present the Item 19 financial representations. That's why you really need to understand what it covers which is how franchisees in that system are making money. It's NOT A GUARANTEE …
… watch/listen to the full episode/podcast