If you’re interested in purchasing a franchise, we know that the FDD (franchise disclosure document) is important. The information provided in the FDD helps you to determine whether or not you want to make the purchase.
We also know that one of the first things you’ll likely flip to in an FDD is Item 19.
Item 19 is meant to display “Financial Performance Representations” of that franchise and give a potential owner a better idea of not only what they might stand to earn but also what goes into those earnings.
While the hope is to have some transparency into the financials, it’s not always that cut-and-dry. If you are comparing franchises, it’s important to remember that the information shared can really vary from franchise to franchise.
And since franchises are not required to include Item 19, sometimes this information is not always even shared.
Here’s a little bit about what you can expect from Item 19 in a Joshua Tree Experts FDD.
Why Item 19 is Important
We know that when people start their research on whether or not they want to invest in a franchise, they want to be able to answer How much money can I make?
The idea is that Item 19 will help provide an answer to that question…or at least a better understanding. Obviously, there are many factors that impact profitability and these numbers only give a look at the big picture.
However, that glimpse is important.
At Joshua Tree Experts, we understand that you want to know whether an investment in our franchise is going to be financially beneficial. We understand that you’re looking to get as good an understanding of the potential financials as you can—and we respect that!
What You Can Expect to See with Item 19 from Joshua Tree Experts
We have always believed in transparency and it’s no different with our treatment of Item 19. We understand that this is important information and that it’s likely one of the first things that you’ll want to see.
You can expect to see Item 19 in our FDD for this reason.
You can also anticipate that we’ll provide a good breakdown of information that will help you to get a clearer understanding of not only how much you might be able to earn but what will be involved in those earnings.
For instance, you’ll be able to find out how much revenue we produce within each department—so, how much revenue in general tree care, plant health care, lawn care, and pest control.
We also show the number of services that we performed within that total revenue.
In Item 19, we will also disclose expenses that must be covered to successfully run a business. These include:
- Total direct labor cost
- Job material cost
- Indirect wages
- Advertisement costs
- Credit card processing expense
- Vehicle and equipment expenses
- Additional operating expenses
Having a better understanding of spending and also earning will help you to develop a better picture of what owning a Joshua Tree Experts franchise might look like for you.
We’re also here to answer additional questions related to Item 19 or anything else in the FDD for that matter. We know that information like this can be overwhelming, particularly when it’s all written out in a formal document.
But don’t worry, it’s not meant to take the place of a conversation. We’re always here to help! If there’s ever anything that you don’t understand or that you just want to ask more questions about, please know that we are here for you and ready to help.
Are you ready to grow a successful business from strong roots? Joshua Tree Experts has the proven systems and processes in place to help. Request a meeting and begin your journey today.