About Item 19s
The single most important factor to consider when buying a franchise—or any business for that matter—is a realistic projection of sales, expenses and profits. Specifically, how much can you expect to earn after working 65 hours a week for 52 weeks a year? A prospective franchisee has no experience with the potential new franchise and therefore cannot project what his or her sales and profits will be over the next five years. The only source with the ability to supply accurate information about a franchise opportunity is the franchisor itself with its UFOC / FDD document.
What is an Item 19 Earnings Claims Statement?
Earnings claims statements are covered under Item 19 of the Uniform Franchise Offering Circular or UFOC (also known as Franchise Disclosure Document or FDD). In their broadest sense, earnings claims are defined as estimates or historical figures detailing the level of sales, expenses and/or income a prospective franchisee might realize as the owner of a particular franchise. However, the earnings claims statement is voluntary and unverified, and the information's format and level of detail are left completely to the franchisor's discretion. Neither the FTC nor state regulatory agencies checks the document for accuracy or completeness. The only requirement for any Item 19 is that the franchisor has a "reasonable basis" for the earnings claims at the time the statement is prepared.
Still, you can learn a great deal by reviewing earnings claims. Most importantly the ability to identify the sales and costs that would be relevant to your own franchise, as well as to your skills and your experience, is invaluable. Be aware of the limitations in the information presented and do not be swayed by the profit margin alone as you should also consider the cost side of the equation. Also keep in mind that the historical data used as the basis for the claims that may not apply to every geographic region, individual location or franchisee, whose experience and business acumen may vary.
Earnings Claims Availability
Because publication of an earnings claims statement is at the sole discretion of franchisors, only about 40% provide this information. The format for an Item 19 is also at the discretion of the franchisors, so it can range anywhere from a half page to 15 pages in length. UFOCs.com makes every effort to provide all available earnings claims statements, in their entirety, to the public.
Sample Earnings Claims
Here are some detailed and informative examples of earnings claims statements. The files below are in PDF format. You must have Adobe Reader to view these sample files, as well as those available for purchase.
Baskin-Robbins
FASTSIGNS
Meineke
Mrs. Fields
Uno Chicago Grill
When ordering an earnings claims statement(s), please keep in mind that there is no guarantee that an earnings claims statement you select will be similar in format to the ones presented here. The samples above are meant to give a general idea of the information offered and of how varied a statement can be.
The single most important factor to consider when buying a franchise—or any business for that matter—is a realistic projection of sales, expenses and profits. Specifically, how much can you expect to earn after working 65 hours a week for 52 weeks a year? A prospective franchisee has no experience with the potential new franchise and therefore cannot project what his or her sales and profits will be over the next five years. The only source with the ability to supply accurate information about a franchise opportunity is the franchisor itself with its UFOC / FDD document.
What is an Item 19 Earnings Claims Statement?
Earnings claims statements are covered under Item 19 of the Uniform Franchise Offering Circular or UFOC (also known as Franchise Disclosure Document or FDD). In their broadest sense, earnings claims are defined as estimates or historical figures detailing the level of sales, expenses and/or income a prospective franchisee might realize as the owner of a particular franchise. However, the earnings claims statement is voluntary and unverified, and the information's format and level of detail are left completely to the franchisor's discretion. Neither the FTC nor state regulatory agencies checks the document for accuracy or completeness. The only requirement for any Item 19 is that the franchisor has a "reasonable basis" for the earnings claims at the time the statement is prepared.
Still, you can learn a great deal by reviewing earnings claims. Most importantly the ability to identify the sales and costs that would be relevant to your own franchise, as well as to your skills and your experience, is invaluable. Be aware of the limitations in the information presented and do not be swayed by the profit margin alone as you should also consider the cost side of the equation. Also keep in mind that the historical data used as the basis for the claims that may not apply to every geographic region, individual location or franchisee, whose experience and business acumen may vary.
Earnings Claims Availability
Because publication of an earnings claims statement is at the sole discretion of franchisors, only about 40% provide this information. The format for an Item 19 is also at the discretion of the franchisors, so it can range anywhere from a half page to 15 pages in length. UFOCs.com makes every effort to provide all available earnings claims statements, in their entirety, to the public.
Sample Earnings Claims
Here are some detailed and informative examples of earnings claims statements. The files below are in PDF format. You must have Adobe Reader to view these sample files, as well as those available for purchase.
Baskin-Robbins
FASTSIGNS
Meineke
Mrs. Fields
Uno Chicago Grill
When ordering an earnings claims statement(s), please keep in mind that there is no guarantee that an earnings claims statement you select will be similar in format to the ones presented here. The samples above are meant to give a general idea of the information offered and of how varied a statement can be.
