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Revamping Your Item 19 for Franchise Success

Key Takeaways:

[0:22] Josh introduces the show as a solo episode.

[0:34] One of the most important things for franchisors to get right is the Item 19 section of the Franchise Disclosure Documents.

[1:08] Item 19 includes a franchisor’s financial performance representation.

[1:30] Several years back, franchisors didn’t provide financial performance representation out of fear that it would be misinterpreted and lead to false accusations. However, this has changed over time.

[2:15] One of the biggest questions a franchisee can ask is “how will this business do financially?”

[3:37] To lay the foundation for a strong franchise system, you will have to provide your prospective franchisees with a fair representation of what the opportunity is from a financial perspective.

[4:30] When creating or revising your Item 19, you have to be aware of the difference between corporate owned stores and franchised locations.

[5:35] The key is finding the balance between being transparent while not being misleading.

[6:10] Under the new franchise guidelines, you can categorize your different outlets, but you have to do so in a fair and responsible way.

[7:25] If you can come up with an Item 19 that gives a global representation of your franchise system, which may mean including the bad locations too, you can overcome a lot of the objections many franchisees have.

[8:15] You should revisit your Item 19 on an annual basis so that it is consistently updated.

[9:05] As one of the most highly litigated items in franchising, be sure that you always consult a franchise professional before revising or drafting an Item 19.

[9:35] Thanks for listening, and please, reach out to Josh anytime through email at josh@franchiseeuphoria.com. If you enjoyed this interview, please leave us a review on iTunes.

 

Mentioned in This Episode:

josh@franchiseeuphoria.com

www.franchiseeuphoria.com/franchise5

Josh Brown

Josh Brown

Hi! I’m Josh Brown, franchise attorney and creator of the Franchise Euphoria podcast. I’m just your average guy who loves to golf, eat hibachi, and immerse myself in the ever-expanding franchise world.

My goal is to navigate entrepreneurs and all people interested in the current events of franchises through all the hottest topics and most popular tools for success. Going on four years now, Franchise Euphoria is hotter than ever and ready to help you plan and execute a pathway to success.

Josh Brown

Josh Brown

Hi! I’m Josh Brown, franchise attorney and creator of the Franchise Euphoria podcast. I’m just your average guy who loves to golf, eat hibachi, and immerse myself in the ever-expanding franchise world.

My goal is to navigate entrepreneurs and all people interested in the current events of franchises through all the hottest topics and most popular tools for success. Going on four years now, Franchise Euphoria is hotter than ever and ready to help you plan and execute a pathway to success.

pardee2003 from United States
11/16/2019
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Great and applicable information from professionals in the franchise world that are doing it every day. I’ve listened to 3 episodes: Gutter Brothers, Woofies, and Cycle Bar. Enjoyed all and looking forward to hearing more.
WTutor311 from United States
8/30/2019
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Highly recommend. Great guests. Filled with tons of helpful information.
Katie Joy B. from United States
7/16/2019
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Josh and his wide variety of knowledgeable guests are truly rockstars! They deliver quality (and free!) franchise knowledge and advice in each and every episode. The great advice they provide, combined with the engaging way they deliver it had me hooked from the very first listen. Thanks for putting out such a stellar show Josh - keep up the great work!
Jordan gross from United States
07/15/2019
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This podcast provides the advice necessary to start building, growing, and scaling your business TODAY! The host asks probing questions of his guests that add value to the listeners in an immediately implementable way!
VPugliese from United States
07/15/2019
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What do you get when you combine business savvy, legal expertice and a great personality? You get the ultimate podcast for franchise owners. Josh Brown brings it all togehter perfectly with Franchise Euphoria. Not only does he possess all of the skills and abiliites above, but he has great guests, asks awesome questions and created the ideal podcast for this niche. If you have a franchise, or are considering it, subscibe to this show and consume all of the content!
Mick James from United States
06/05/2019
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Started listening to Josh's podcast after the wife and I decided to buy a franchise and I quickly went through about 200 episodes on 1.5x & 2x, before signing on to purchase a franchise. Josh's info was an invaluable part of our decision to buy, and after listening to so many episodes, I felt like I knew and trusted him on a personal level, so it was a no-brainer to enlist his services when it came time to review the franchise agreement. Josh was super easy to talk to and very empathetic to our needs, and being first time business owners, we needed all the empathy we could get. Josh helped us negotiate a great deal with the franchisor and we were very happy with his services. Great podcast, great guy, great service to anyone involved in the franchise world!
Dean575 from United States
06/04/2019
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Very interesting discussion. I found the information valuable.
Summieysum from United States
05/06/2019
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I've just completed the legal process of franchising my business and have now begun selling franchises. Just found this podcast and it's an incredible resource! Great content and Josh is a very engaging host. Highly recommend for franchisors and franchisees.
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