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

Filta Environmental Kitchen Solutions

Filta Franchisee Feature - Leo Tartaglia - 1851 Franchise

Doubling Down on Dedication: Why Leo Tartaglia Reaffirmed His Commitment to Filta After a Decade

filta-franchise-leo-tartaglia

Melting Pot

Melting Pot team holding $1.2 million check addressed to St. Jude Children's Research Hospital

Melting Pot’s Million-Dollar Mission: A 20-Year Partnership With St. Jude That’s Changing Lives

melting-pot-st-jude-partnership

Paris Baguette Canada

Paris Baguette CDO Nick Scaccio Talks Franchise Growth, Training and Innovation 

Paris Baguette CDO Nick Scaccio Talks Franchise Growth, Training and Innovation on the Late Night Restaurant Show Podcast

paris-baguette-coo-nick-scaccio-franchise-growth-innovation

Comfort Keepers

Comfort Keepers - Butch and Niki Irwin - Father's Day - 1851 Franchise

A Legacy of Love: A Father-Daughter Journey To Bring Comfort Home

comfort-keepers-monroe-butch-niki-irwin

Minuteman Press International

Minuteman Press Franchise Owner Corey Sanders at his center in Greenville, SC.

Minuteman Press Franchise Review: From Business Consulting to Printing

minuteman-press-franchise-review-from-business-consulting-to-printing

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 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

Dave’s Hot Chicken Sold to Roark Capital in $1 Billion Deal to Fuel Global Expansion

daves-hot-chicken-sold-to-roark-capital-in-1-billion-deal-to-fuel-global-expansion

Homebuyers Keep Buying — And That’s Good News for Home Service Franchises - 1851 Franchise

Homebuyers Keep Buying — And That’s Good News for Home Service Franchises

homebuyers-keep-buying-and-thats-good-news-for-home-service-franchises

AI Could Push Unemployment to 20% — Fueling a Surge in First-Time Franchise Buyers - 1851 Franchise

AI Could Push Unemployment to 20% — Fueling a Surge in First-Time Franchise Buyers

ai-unemployment-impact-white-collar-job-loss

How To Sell Just One Franchise: What You’ll Learn at FranCamp NJ 2025

how-to-sell-just-one-franchise-what-youll-learn-at-francamp-nj-2025

House Passes Tax Relief Package With Key Benefits for Small Businesses and Franchises

house-passes-small-business-tax-relief-bill-2025

How Car Sales Taught Buddy's Home Furnishings’ Mitchell Lee the Secrets of Franchise Development

how-car-sales-taught-buddys-home-furnishings-mitchell-lee-the-secrets-of-franchise-development

busy-bee-jumpers-consumer-positioning-image-kids-jumping-bounce-house

Delivering Fun With a Smile: How Busy Bee Jumpers Earns 5-Star Raves From Families Across New England

busy-bee-jumpers-party-rentals

busy-bee-jumpers-franchise-positioning-image

Bouncing Into Business: How Busy Bee Jumpers Is Building the First National Bounce House Franchise

franchise-opportunity-busy-bee-jumpers-franchise

Busy Bee Jumpers: Where Proven Success Meets People-First Franchising

busy-bee-jumpers-franchise-culture-success

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

Sola Salons Franchisee Grows Salon Freedom Into a Multi-State Powerhouse 

sola-salons-franchisee-grows-salon-freedom-into-a-multi-state-powerhouse

What You Need To Know About Low-Cost Franchise Opportunities

what-you-need-to-know-about-low-cost-franchise-opportunities

Dan Yangas Brings Family Flooring Legacy Full Circle With Footprints Floors Franchise in Naperville 

Dan Yangas Brings Family Flooring Legacy Full Circle With Footprints Floors Franchise in Naperville, Illinois

dan-yangas-brings-family-flooring-legacy-full-circle-with-footprints-floors-franchise-in-naperville-illinois

How Franchisees Can Evaluate Potential Gross Sales

MORE STORIES LIKE THIS