Item 19 refers to the section of the all-important Franchise Disclosure Documnet ( or FDD for short) that provides public information or statements relating to financial performance of existing franchise units for a particular franchise brand. It may also contain statements about how the franchise concept may perform in the future. Although franchisers are not required by law to include an item 19 in their FDD, any info relating to financial performance can only be included in this particular section. Not all item 19 sections are alike as Franchisers also have lots discretion about what type of financial or sales info they choose to disclose in this section.
As far as due diligence the significance of providing an item 19 section is it may help give the prospective franchisee some valuable insight into the potential earnings, costs, viability, and ROI of a partcular franchise opportunity. And since not all Franchisers choose to provide an item 19 in the their FDD it also can give A franchiser a significant sales tool and advantage when trying to close qualified and sophisticated prospects.