1851

As a prospective franchisee, there is only one place to look for a brand&rsquo;s all-important financial performance numbers - <a href="https://1851franchise.com/details/2703090/The-Franchise-Bible-Item-19" target="_blank">Item 19 of the FDD</a>. However, not all of the numerous facts and figures found in Item 19 tell the whole story of a franchisor&rsquo;s success. That is why franchisees must look closely at context and the overall big picture of a brand&rsquo;s financial disclosure, especially when it comes to evaluating gross sales.

&ldquo;In Item 19, a franchisor will disclose average gross sales - what percentage of units fall above or below the average and the median gross sales,&rdquo; said Charles N. Internicola, managing partner and founder of <a href="http://franchiselawsolutions.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-franchisees-can-evaluate-potential-gross-sales-2703119" target="_blank" rel="nofollow" target="_blank">The Internicola Law Firm, PC</a>. &ldquo;But just knowing gross sales is not going to be an indicator of future revenue.&rdquo;

Internicola says that while it is important to know what kind of sales a franchise&rsquo;s units are averaging, these numbers tell nothing on their own about potential profit.

&ldquo;Gross sales certainly give some insight into how other financial details and expenses can fit in,&rdquo; said Internicola. &ldquo;But by itself it shouldn&rsquo;t be relied on for prospective franchisees at all.&rdquo;

Less commonly, franchisors will also include operating expenses and operating cash flow and, along with these numbers, gross sales can be a crucial piece of the decision-making puzzle. But Internicola warns that obsessing over the big-picture numbers is not the most important thing new franchisees should be focusing on.

&ldquo;When you just start your franchise, you should be focused on things like marketing and customer acquisition, and not on macro numbers like gross sales,&rdquo; said Internicola. &ldquo;Concentrate first on acquisition and controlling expenses.&rdquo;

When a franchisee first purchases a business and is getting things up and running, it is easy to think only in terms of sales, but Internicola sees something much more crucial happen among franchisees who end up successful.

&ldquo;They need to be proactive and understand that they should be working every day toward making themselves an expert in whatever line of work they are in,&rdquo; he said. &ldquo;They take on an obligation to be responsible for handling marketing, managing [return on investment] ROI, and forging a partnership with their franchisor.&rdquo;

And along those same lines, prospective franchisees should be looking for a franchisor partner that treats them the same way and not one trying to get by simply on flashy financial numbers.

Said Internicola, &ldquo;It is far better to have a proactive partner that will nurture and help growth, rather than one just throwing out gross sales numbers and not focusing on unit-specific metrics.&rdquo;

How Franchisees Can Evaluate Potential Gross Sales

1851 Franchise

Why one franchise lawyer says to take gross sales claims with a grain of salt.

how-franchisees-can-evaluate-potential-gross-sales

SweatHouz

Science, Wellness, Growth: How SweatHouz CEO Mike Tan is Shaping the Future of Contrast Therapy Franchising

mike-tan-franchising-strategy-sweathouz

Biscuit Belly Franchising

Biscuit Belly Expands Across the Southeast U.S. With Six New Locations

biscuit-belly-expands-across-the-southeast-us-with-six-new-locations

Layne's Chicken Fingers

Photo of exterior of Layne's Chicken Fingers restaurant

Layne’s Chicken Fingers Signs Landmark 44-Restaurant Deal, Shatters Records in Monumental Third Quarter

laynes-chicken-franchise-growth-records

Children's Lighthouse

Why Children’s Lighthouse Is a Great Opportunity for Swim School Franchisees

why-childrens-lighthouse-is-a-great-opportunity-for-swim-school-franchisees

Children’s Lighthouse Closes the Third Quarter with Record Franchise Signings and New School Opening

childrenslighthouse-q3-2025-growth

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Amazon outage, AWS outage, Amazon AWS logo

The Day the Cloud Stalled: How Amazon's Outage Impacted Franchise Economy

amazon-aws-outage-franchise-impact-travel-dining-failure

Thursday 1851 Franchise Agg - NASAA’s Noncompete Push

NASAA’s Noncompete Push Puts Franchise Growth on Uncertain Ground

franchise-noncompete-nasaa-advisory-reasonableness-standard

How a Steady Economy Could Help Franchisors Plan Their Next Move

how-a-steady-economy-could-help-franchisors-plan-their-next-move

Bed Bath & Beyond - Franchise Expansion - Retail Strategy - 1851 Franchise

Bed Bath & Beyond Launches Franchise Model as Part of Comeback Strategy

bed-bath-beyond-franchise-expansion-retail-strategy

Senior Entrepreneurship - Franchising - 1851 Franchise

Senior Entrepreneurship Is Rising — And Franchising Is a Key Outlet

senior-entrepreneurship-franchising-silver-startups

image of franchise deep dive from 1851 franchise on doody calls franchise authority brands

DoodyCalls Franchise Costs, Fees, Profit and Data for 2025

doodycalls-franchise-deep-dive

image of mellow mushroom deep dive into financials article from 1851 franchise

Mellow Mushroom Franchise Costs, Fees, Profit and Data for 2025

mellow-mushroom-franchise-deep-dive

How goGLOW Turned Clean Beauty Into a Scalable Franchise and Why It’s Accelerating Now

goglow-clean-beauty-tanning-franchise

Shoot 360 Aims for the Topgolf Model, Using Elite Basketball Tech to Appeal to Players '7 to 70'

shoot-360-franchise-growth-tech-basketball-brad-butterworth

A Practical Playbook: Who To Call First When Franchising Your Business

franchising-your-business-who-to-call-first

image of jerome hanway from right at home Las Cruces, New Mexico 1851 franchise franchisee spotlight

Jerome Hanway Is Building His Right at Home Franchise Around His Mission To Serve

right-at-home-franchise-las-cruces-jerome-hanway

NJCAR v. Ford - New Jersey Supreme Court Limits Standing Under Franchise Practices Act

New Jersey Supreme Court Limits Standing Under Franchise Practices Act

new-jersey-franchise-practices-act-njcar-v-ford

graphic image of an 1851 franchisee spotlight brayden and johnny steven of teriyaki madness

Father-and-Daughter Team Bring Teriyaki Madness to Wichita, Kansas, With Big Expansion Plans

johnny-brayden-steven-teriyaki-madness-wichita

1851 Franchisee Spotlight graphic with photo of Barb Volk and KidStrong logo

Why This Orangetheory Fitness Franchise Owner Is Developing KidStrong Franchises

kidstrong-franchise-owner-barb-volk-2025

How Franchisees Can Evaluate Potential Gross Sales

MORE STORIES LIKE THIS