Franchise Facts and Figures: Item 19 Franchise Performance Representations

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FranchiseGrade.com releases their Franchise Facts and Figures Report on Item 19 Financial Performance Representations (FPR) analysis, detailing how the evolution of the Item 19 FPR has impacted franchise sales and development efforts.

Due to the opportunity to present Item 19 information in a variety of formats, there is little reason for a franchise system to withhold Item 19 FPR data.

Download the full report here.

Item 19 Financial Performance Representations (FPR) are a key component for performing franchisee due diligence. An FPR allows a prospective franchisee to analyze a franchise investment and the opportunity for a return. FranchiseGrade.com research also shows that franchisors who include an Item 19 FPR in their FDD had a distinct advantage over their competition as evidenced by new franchise growth.

There is a wide variety of Item 19 Financial Performance Representation (FPR) presentations. A minority of franchise systems are very transparent, providing full profit and loss statements. The majority provide a system wide average and typically present tiers or quartiles and gross revenue. Some presentations have combined franchisor and franchisee locations, and others present the top grossing location in addition to quartiles.

Jeff Lefler, CEO FranchiseGrade.com highlights "The evolution of Item 19 information continues to favor healthy, successful brands that can present useful information for the prospective franchisee. This transparency is also fuelling increased sales for the systems that provide an FPR. If franchise systems expect to grow and develop, presenting an Item 19 FPR is no longer an option."

Due to the opportunity to present Item 19 information in a variety of formats, there is little reason for a franchise system to withhold Item 19 FPR data. Between social pressures and increased due diligence efforts of prospective franchisees it has now become disadvantageous for a franchise system that does not provide an Item 19 FPR.

About FranchiseGrade.com
FranchiseGrade.com is the leader in competitive market research and objective analysis for the franchise industry. Their franchise assessment, grading and standardized reporting tools provide industry stakeholders with critical data driven metrics to support the growth of successful franchise systems. FranchiseGrade.com works to raise the bar for market research in the franchise industry to build a stronger franchise community.

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