Earnings claims built from a subset of units

We read Item 19 in the latest FDD of the largest systems that make an earnings claim (by outlet count), using only filings no more than 24 months old. For each we record the headline representation — the first or broadest table for the main format — its metric, period, the units included, any total the filing compares them with, the groups it says it leaves out, whether it prints a mean and a median, and whether it shows costs. Every printed number we record was then located again in the Item 19 text by software.

The denominator is the total the filing itself states where it states one; otherwise the same FDD's Item 20 year-end count of outlets of the same kind (franchised, company-owned or both), which includes outlets opened during the year — so a fast-growing system shows a lower share for that reason alone. Figures that are not annual revenue per outlet (per franchisee, per job, per room) are not compared with Item 20 counts. Claims whose tables are images in the filing are left out.

Graded on three things the filing states: coverage (2 points if the figure covers at least 75% of the units it is compared with, 1 point for 50–75%), centre (2 points if it prints both a median and a mean, 1 for one of them), and costs (2 points for costs through a profit line or full cost detail, 1 for some cost items). 5–6 points = More complete, 3–4 = Partial, 0–2 = Limited. The grade describes the disclosure, not the business.

This describes how each disclosure is built, not whether the franchisor's claim complies with the FTC Rule or state law. If you represent a listed franchisor and we've misread your Item 19, use the correction link on its row. Related: franchisor financial health (Item 21).