{"id":4079,"date":"2019-04-17T10:23:51","date_gmt":"2019-04-17T14:23:51","guid":{"rendered":"https:\/\/allegrafranchise.com\/?p=4079"},"modified":"2019-04-17T10:23:51","modified_gmt":"2019-04-17T14:23:51","slug":"the-item-19-of-a-franchise-disclosure-document-answers-your-most-important-question","status":"publish","type":"post","link":"https:\/\/www.allegramarketingprint.com\/franchise\/why-allegra\/industry-news\/the-item-19-of-a-franchise-disclosure-document-answers-your-most-important-question\/","title":{"rendered":"The Item 19 of a Franchise Disclosure Document Answers Your Most Important Question"},"content":{"rendered":"

In life, there are many questions. As a child, you pestered your parents with, \u201cAre we there yet?\u201dIn school, it was, \u201cWhere\u2019s the party?\u201d And, as an entrepreneurial adult and prospective franchise owner, you\u2019ll first and foremost want to know: \u201cHow much money can I make?\u201d<\/p>\n

Many years ago, the Federal Trade Commission mandated that franchisors prepare what has become known as a Franchise Disclosure Document\u2014an FDD. The purpose of the FDD is to provide comprehensive and audited information about the business opportunity in order for franchise candidates to make an educated decision.<\/p>\n

The FDD includes 23 sections or \u201citems\u201d that answer specific questions including the history of the franchisor, bankruptcies, litigation, total initial investment, training, service territory, and an item 19, a Financial Performance Representation (FPR)\u2014how much money you can make.<\/p>\n

When preparing the FPR, franchisors are given guidelines on what can and cannot be included, and the method of displaying data and calculating the dollars. It ensures that there\u2019s consistency in the format and methodologies in delivering the numbers. And it allows prospects to compare and contrast different franchisor Financial Performance Representation\u2019s (FPRs).<\/p>\n

Before you settle into a lengthy and thorough reading of an FDD, and particularly the Item 19, make a long list of questions, possibly in consultation with your accountant, that are pertinent to the performance of the specific business, your situation and location.<\/p>\n

Then when you are ready to wade into the Item 19, understand that franchisors have significant flexibility in the depth of information they can include. For example, one franchisor may only show gross sales<\/strong> for company-owned and franchised units. Another franchisor may include gross profits<\/strong> and other financial metrics relevant to an industry or category, e.g., average sale<\/strong> per customer<\/strong> and products sold<\/strong>.<\/p>\n

The one thing to look for in any Item 19 is transparency<\/u>. A good example can be found in the 2019 Allegra Marketing Print Mail franchise<\/a> FDD. From system-wide sales to annual sales of Allegra franchised Centers to an Operating Ratio Study and much more, Allegra Network LLC provides a wealth of information for candidates to make a well-informed decision.<\/p>\n

While franchisors are required to present you with an FDD, they are not required<\/em> to include an Item 19. There are any number of valid reasons why a franchisor may choose not include an Item 19. But make it your second most important question, \u201cWhy not?\u201d<\/p>\n

If you choose to own your own business and join a franchise system, don\u2019t be surprised if history repeats itself: as you monitor your sales and profit growth and success of the business, you may find yourself asking, \u201cAre we there yet?\u201d And when you reach your personal and financial goals, you\u2019ll deservedly want to celebrate and inquire, \u201cWhere\u2019s the party?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

In life, there are many questions. As a child, you pestered your parents with, \u201cAre we there yet?\u201dIn school, it was, \u201cWhere\u2019s the party?\u201d And, as an entrepreneurial adult and prospective franchise owner, you\u2019ll first and foremost want to know: \u201cHow much money can I make?\u201d Many years ago, the Federal Trade Commission mandated that…<\/p>\n","protected":false},"author":2,"featured_media":4082,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[],"class_list":["post-4079","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-franchise-how-to"],"_links":{"self":[{"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/posts\/4079","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/comments?post=4079"}],"version-history":[{"count":0,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/posts\/4079\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/media\/4082"}],"wp:attachment":[{"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/media?parent=4079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/categories?post=4079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.allegramarketingprint.com\/franchise\/wp-json\/wp\/v2\/tags?post=4079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}