FRANCHISE ITEM 19 REALITY CHECK · RUNS IN YOUR BROWSER · NOTHING UPLOADED

What does that franchise earnings claim mean for you?

Type in the tiers from Item 19 of a franchise disclosure document. The page shows the average against the median, how much of the system the figures cover, what each tier keeps after royalty, ad fund and your own costs, the payback on your investment, and the share of units that would not pay you a salary.

For people weighing a franchise purchase. New to the document? Read how to read an Item 19 earnings claim, with a worked example.

1. Item 19 tiers

2. Your costs and investment

Item 7 of the document lists the investment range; Items 5 and 6 list the fees. Item 19 sales figures usually exclude all of this, and some include or exclude owner labor, so read its footnotes.

Enter the tiers, then click Check the claim.

How it works

Average and median: the average is total reported revenue over reporting units. The median is the tier containing the middle unit. When the average is well above the median, a few strong units are lifting the headline number.

Coverage: if you enter the number of units in the system, the page shows what share the figures describe. You can assume the missing units earn a fraction of the reported average to see the system-wide figure that implies. That fraction is your assumption.

Owner earnings: revenue minus the percentage costs (royalty, ad fund, cost of goods, scaling labor, other) minus fixed costs. Payback is investment divided by owner earnings, before tax, debt service and any ramp-up period.

Not modelled: a first-year ramp, loan payments, taxes, working capital, renewal and transfer fees, required remodels, and whether the document's figures include owner labor. Read the footnotes to Item 19 and talk to current and former franchisees listed in Item 20.

Related tool: the franchise unit economics calculator builds a month-by-month cash plan from your own assumptions.

Checked: the test suite recomputes hand-worked cases for owner earnings, break-even, payback and the coverage adjustment.

Common questions

What is Item 19 in a franchise disclosure document?

Item 19 is the section of the Franchise Disclosure Document where a franchisor may state what its franchised or company units earn, such as average sales, quartiles or profit. It is optional, so many franchisors say nothing, and the figures usually cover only some units over some period, with footnotes that define which ones.

How do I read Item 19 figures without being misled?

Start with how many units the figures cover compared with the whole system, then compare the average with the median. A high average over a small share of units, or an average far above the median, describes the best operators rather than a typical new buyer. This page shows both, and what each tier earns after royalty, ad fund and your own costs.

Are Item 19 sales figures the same as profit?

No. Most Item 19 tables report gross sales or revenue. Royalty, ad fund, cost of goods, labor, rent and your own pay all come out of that figure, so two units with the same sales can have very different owner earnings. Enter your own cost assumptions and the page converts each tier from sales to owner earnings.

What if only some units are included in Item 19?

Franchisors often exclude new units, closed units, company-owned units or units that were not open a full year. If the figures cover well under the whole system, the page lets you assume the missing units earn a share of the reported average and shows the system-wide figure that implies. That share is your assumption, not a fact from the document.

Is my data uploaded anywhere?

No. Everything is calculated in your browser, nothing is sent to a server, and there are no accounts.