What Item 19 Actually Tells You

The one place numbers are allowed

Item 19 of a Franchise Disclosure Document is where a franchisor may make a financial performance representation — the FTC Franchise Rule’s term for any statement, oral or written, that suggests a specific level or range of actual or potential sales, income, gross profit or net profit for a franchised or company-owned outlet.

Two consequences follow, and they surprise most first-time buyers.

The first is that Item 19 is optional. A franchisor may decline to make any financial performance representation at all, and many do. When a franchisor makes none, the Rule requires Item 19 to say so, in language telling the reader that the franchisor does not make such representations and that any information about performance obtained from other sources should be treated with caution. An empty Item 19 is not a violation. It is a choice.

The second is that Item 19 is the only permitted channel. If a franchisor makes a financial performance representation, it must appear in Item 19. A development agent, broker or franchise salesperson who tells you over lunch what a store “typically does” is operating outside that structure. If a number matters to your decision, ask to see it in Item 19, and treat anything else as conversation.

Where a franchisor does make a representation, the Rule requires that it have a reasonable basis and written substantiation at the time it is made, and that the franchisor state it will provide that substantiation to a prospective franchisee on reasonable request. That request is free, and asking for it is one of the highest-value things a buyer can do.

The population is the whole story

Every Item 19 figure describes some group of outlets. Which outlets, over what period, is the single most important fact on the page — more important than the number itself.

The 2026 Jiffy Lube FDD, Item 19, is a useful worked example because it defines its population precisely. The main tables cover franchised service centers that were open for twelve full months in each of calendar 2023, 2024 and 2025 — 1,732 centers in 2025. All company-owned centers are excluded, and so is any franchised center open less than a full year.

Ask, of any Item 19 table, the following questions.

Are franchised and company-owned units mixed, separated, or is one group excluded? Company-owned units are often in better locations, are frequently older, and do not pay royalties out of the same pocket. Jiffy Lube’s Item 19 excludes its 318 company-owned centers entirely, so the figures describe franchisee performance — a cleaner comparison than a blended table, but one that also means the franchisor’s own operating results are not on display.

Are immature units excluded? Excluding units open less than a full year is standard and defensible, since a partial year is not comparable. But it also means the table cannot tell you what your first year looks like, which is exactly the year that determines whether you survive. Some franchisors address this with a separate new-unit table. Jiffy Lube’s Item 19 does: the eight newly built franchised centers whose first full year was 2025 averaged $720,479, against a system average of $1,109,719. That gap — roughly 35 percent — is the real disclosure, and it rests on eight stores.

Are closed units excluded? Almost always, yes. A table of surviving units is a survivorship-biased sample. The units that failed and closed during the measurement period are, by construction, absent from the average.

Does the population mix formats? Jiffy Lube’s Item 19 notes that some centers in the population participate in optional programs such as Multicare, which adds brakes, suspension and tire services. A single average across mixed formats describes no actual store.

Mean, median and quartiles

A mean is the arithmetic average: add the values and divide by the count. A median is the middle value: half the units are above it, half below. In franchise data these two numbers are almost never the same, and the direction of the gap tells you about the shape of the system.

Sales distributions are usually right-skewed — a small number of very high-volume units pull the average up above the middle of the pack. Jiffy Lube’s 2026 FDD, Item 19, shows this clearly: the 2025 mean was $1,109,719 and the median $1,004,273, a gap of about ten percent, with individual centers ranging from $195,661 to $5,962,733.

Quartiles cut the population into four equal groups ordered by performance. They are the most informative presentation available in an Item 19 and the one to look for. Jiffy Lube’s Item 19 divides its 1,732 centers into four groups of 433 and reports an average for each: $549,346 in the lowest quartile, $857,988, $1,160,376, and $1,871,164 in the highest. The relevant reading is not the top number. It is that a quarter of centers in an established, nationally advertised system averaged under $550,000 in annual sales, and that the lowest recorded center did under $200,000.

When a franchisor reports only a mean, you cannot see the spread, and the spread is where your risk lives.

“Percent attaining”

Item 19 tables often report the number and percentage of outlets that met or exceeded a stated figure. This is required context wherever an average is given, and it is the fastest sanity check available.

Jiffy Lube’s Item 19 discloses that 701 of 1,732 centers — 40.5 percent — exceeded the system average in 2025. Read that plainly: in a system of 1,732 units, nearly six in ten did worse than the number a buyer is most likely to remember. The same disclosure appears within quartiles, where 36.3 percent of the top quartile exceeded that quartile’s own average.

If an Item 19 gives an average without a percent-attaining figure, ask for one.

Gross sales, net sales, and the words in between

Sales definitions are not standardized across franchise systems, and the same table can use more than one.

Gross sales normally means all receipts from goods and services, typically excluding sales taxes and customer refunds. It is usually the royalty base, which is why franchisors track it precisely. Net sales or “net adjusted sales” means gross sales less some set of deductions — promotions, discounts, warranty work, fleet allowances — and the deductions differ by system.

The 2026 Jiffy Lube FDD illustrates why this matters. The Item 19 narrative states that the sales reported are Gross Sales and are the royalty base, while every table column is headed “Net Adjusted Sales,” defined in the same Item as Gross Sales less promotions, warranty, non-royalty income and national billed fleet discounts. The two definitions are not the same, and the document does not reconcile them. Whichever is correct, the buyer cannot tell from the page. That is a question for the franchisor, and a good test of how it responds.

Sales are not profit

This is the most consequential thing to understand about Item 19, and it applies to the large majority of them.

Most financial performance representations disclose revenue only. Jiffy Lube’s 2026 Item 19 discloses no cost, expense, margin, EBITDA or profit information of any kind. It tells you what centers rang up. It tells you nothing about what an owner kept.

A million dollars of annual sales is not a million dollars of anything else. Out of it come product cost, labor, rent and occupancy, insurance, utilities, royalty, advertising contributions, technology charges, repairs, and eventually debt service and taxes. Whether that million-dollar store produces $150,000 of owner cash flow or negative $20,000 depends on costs the Item 19 does not disclose.

Some franchisors do publish cost or profit data — a subset report unit-level P&L averages, and a smaller subset report them by quartile. Where that exists, read it with the same population discipline, and check whether the stated expenses include a market-rate manager salary, rent at arm’s length, and the franchisor’s own fees.

Reading a disclosed cost table

If an Item 19 does present costs, work through it in this order. Confirm the population is the same one used for the sales figures; franchisors sometimes report sales for all units and costs for a smaller, better-documented group. Check whether the figures are averages of percentages or percentages of averages — they differ. Look for what is missing: owner or manager compensation, rent where the units are owner-occupied, depreciation, interest, and any corporate overhead you will incur but a company-owned unit would not. Then ask whether the resulting margin is expressed before or after the franchisor’s royalty and advertising fees, because both treatments appear in practice.

Questions worth asking

Ask for the written substantiation behind the Item 19. Ask what happened to units that closed during the measurement period. Ask for the same tables from the prior two or three FDDs, so you can see whether averages are rising because units are improving or because weak units left the population. Ask how the figures were compiled and whether they are audited — Jiffy Lube’s Item 19 states its data are unaudited point-of-sale figures the franchisor believes reliable, which is a normal and honest caveat, not a defect. Ask what the equivalent numbers look like in your specific market. And ask current and former franchisees, whose contact details appear in Item 20, whether the tables match their experience.

Item 19 is the most useful page in an FDD and the easiest to misread. Treated as a description of a population, it is evidence. Treated as a forecast for your unit, it is a mistake.

This guide is informational only. It is not financial, investment or accounting advice. Review the current FDD and consult qualified professionals before investing.

Related

• How to Read a Franchise Disclosure Document (FDD)
• How to Read Item 20 (Outlets and Franchisee Information)
• AUV vs. EBITDA vs. Owner Income
• How Franchise Royalties and Fees Work