Franchise Grade® Report Reveals Value Of Franchisor Financial Transparency
An Analysis of Franchise Systems over a 6 Year Period Indicated that Systems with Item 19 Disclosures Achieved Significant Growth While Others Declined
November 23, 2016 // Franchising.com // New York, NY - FranchiseGrade.com analyzed 1905 franchise systems from 2010 to 2016 to identify any performance results between franchises that provided an Item 19, Financial Performance Representation (FPR) compared to those that didn’t. The results indicated that franchise systems that did an FPR grew by 13.8% while those that failed to provide an FPR declined by minus .02%. Franchisors who provided expense data in their Item 19 grew by the largest margin at 18.4%.
Jeff Lefler, CEO of FranchiseGrade.com commented on the report: “The results of our research validated our belief that franchisors that provide financial transparency through their Item 19 have a distinct advantage over those that don’t. Franchisee candidates seek and require financial information in order better evaluate a franchise opportunity.” Lefler continued: “The data shows that those franchise systems without an Item 19 haven’t grown. But until we see the franchisee results of these systems, the reasons why are assumed but not verified.”
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