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Whether you are an experienced franchisee or first-time candidate, <a href="https://1851franchise.com/codebreaking-for-franchisees-an-fdd-breakdown-2442#stories">reading a franchise disclosure document can be overwhelming</a>. Made up of 23 sections called “Items” and consisting of hundreds of pages, FDDs provide prospective franchise buyers with a detailed analysis of the business ownership opportunity they are considering.<a href="https://1851franchise.com/what-is-an-fdd-2705192#stories">1851 has written many articles that can help first-time readers break down each section</a>. While each item is important, some are more essential than others. Here's what to look for in an FDD.<h4>The All-Important Item 19</h4>While it is important to read the whole document, most people start by skipping to the end for this one reason: Item 19. This section is the bottom line of financial performance metrics for the franchise.&nbsp;“<a href="https://1851franchise.com/the-franchise-bible-item-19-2703090">Item 19 is arguably the most important section of the FDD</a>, however, franchisors are not required to disclose information about potential income or sales,” said <a href="https://www.linkedin.com/in/awesomeflanagan?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-read-a-franchise-disclosure-document-2714764" target="_blank" rel="nofollow">Rob Flannagan</a>, President of <a href="https://franchise.wagnwash.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-read-a-franchise-disclosure-document-2714764" target="_blank" rel="nofollow">Wag N' Wash</a>. “If they do, the law requires they have a reasonable basis for their claims. <a href="https://1851franchise.com/top-5-things-to-know-about-item-19-2703545">It is up to candidates to examine this section very closely</a>.”Flanagan suggested looking for the highs and lows in figures from corporate stores, gross sales, average sales and earnings, as well as noting geographic differences between locations and the number of years the franchise has been in operation.<h4>Other Key Areas To Consider</h4><a href="https://www.linkedin.com/in/john-gotaskie-8a77065/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-read-a-franchise-disclosure-document-2714764" target="_blank" rel="nofollow">John Gotaskie</a>, partner at <a href="https://www.foxrothschild.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=how-to-read-a-franchise-disclosure-document-2714764" target="_blank" rel="nofollow">Fox Rothschild LLP</a>, works with franchise brands of all sizes and is no stranger to the FDD. He advises franchisees to read through the entire document but to focus on a few key areas that could make or break their decision to buy.“<a href="https://1851franchise.com/understanding-the-fdd-item-1-franchisor-s-background-2703051">Item 1 gives an overview of who the franchisor is</a> — who is the parent company and its affiliates,” <a href="https://1851franchise.com/the-franchise-disclosure-document-what-items-are-most-important--2709318">Gotaskie told 1851 Franchise</a>. “But don’t take that information at face value. Do some Googling. Do some research. Find out all you can about the company. Does it have a good track record? If there were problems in the past, were they related to things beyond control?”&nbsp;Item 2 covers business experience, and this is another area in which prospective franchisees really need to do their homework. For example, brand executives may be selling themselves as more accomplished than they are.&nbsp;<a href="https://1851franchise.com/understanding-item-3-of-the-franchise-disclosure-document-litigation-history-2703061">Items 3</a> and 4 cover litigation and bankruptcy, respectively, and Gotaskie noted that, “Every system is going to have litigation, it’s a fact of life. It’s more important to figure out whether a brand has a lot of litigation, and what the character of it is. Is it disgruntled people who joined the system 30 years ago and are unhappy now that there's more structure and less autonomy? Or does it suggest fundamental differences in the system?”Prospective franchisees should also closely review <a href="https://1851franchise.com/initial-and-ongoing-costs-fdd-items-5-7-2703065">Item 7, which is a summary of start-up costs</a>. Gotaskie suggested that prospects look at financial statements and get a copy of the franchise agreement and compare it, line by line, to what the FDD says.&nbsp;<h4>Why You May Need An Attorney</h4>Items 13 and 14 relate to trademarks, another thorny legal area as franchisees can get caught up in third-party lawsuits if the assets aren’t protected. “If you want to take the step of buying a franchise, it’s important to know how well their assets are protected,” said Gotaskie. “Does the brand license a trademark from someone else? In most franchise operations, [the trademark] is one of the most valuable things you’re going to be licensing. You want to make sure that is rock solid, so you don’t get dragged into a third-party lawsuit.”&nbsp;While the FDD contains a lot of information, the language used should not be overly technical. If prospective franchisees have questions after reading through the FDD very carefully, they shouldn’t be scared to <a href="https://1851franchise.com/tips-for-reading-an-fdd-franchisees-share-best-practices-2709430">ask an expert, franchise attorney or the franchisor for help</a>.<h4>Contracts Besides The FDD</h4>“Outside of the franchise agreement itself, there are a lot of other contracts that franchisees have to sign, like a POS operator, product supply company, or non-compete agreements,” Gotaskie said. “Compare those contracts with the FDD itself to make sure it's in line. You might have to sign a POS operator, or make a personal guarantee in regard to financial issues. Or maybe you and your spouse and senior managers have to sign non-compete agreements. All of those are disclosed in the FDD, so make sure you understand those forms and that they match with what is outlined in the FDD.”<h4>Conclusion</h4>“The document is written to protect the franchisee and the franchisor, but it in no way can fully encompass the depth of the franchise partnership,” said Flannagan. “We think of it as a marriage agreement — no one builds their marriage off of the legal paperwork, right? There is no way an FDD can predict what is going to happen in a sector, it simply details the guidelines and guard rails to protect the relationship.”Now, with these insider tips, candidates should be better equipped to crack open the franchise disclosure document and start the process of determining whether the franchise is a match.

How To Read a Franchise Disclosure Document

1851 Franchise

An inside look at the FDD, including how to read it and what to pay the most attention to.

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The Junkluggers

image of junk luggers franchise  2026 Franchisee Conference

The Junkluggers Franchisees and Leadership Gathered to Build Momentum for 2026

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Lawn Squad

Why Invest in a Lawn Squad Franchise vs. Competitors?

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One Hour Heating and Air Conditioning

Women in Leadership Driving Success at One Hour Heating & Air Conditioning

Women in Leadership and Strong Team Culture Are Driving Success at One Hour Heating & Air Conditioning

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Central Creativity

How Central Creativity Is Closing the Resource Gap in STEAM Education

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Pool Scouts

How a Pool Scouts Owner Built Control and Long-Term Growth

Create Wealth Through Franchising Podcast: How a Pool Scouts Owner Built Control and Long-Term Growth

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Jersey Mike's Takes First Steps Towards Initial Public Offering

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Prince St. Pizza Partners With Dave’s Hot Chicken Franchisee for National Growth

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FTC Settlement Puts New Focus on Franchise Disclosure Standards - 1851 Franchise

FTC Settlement Puts New Focus on Franchise Disclosure Standards

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Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units - 1851 Franchise

Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units

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Why Skilled Trades Are Emerging as the Economy’s Most AI-Resilient Careers

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<a href="https://princestreetpizza.com/">Prince St. Pizza</a> has partnered with a&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-daves-hot-chicken-franchise-costs-fees-profit-and-data-2723529">Dave’s Hot Chicken</a> franchisee to support its national expansion,&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">Pizza Marketplace recently reported</a>. The New York-based brand has joined forces with&nbsp;<a href="https://www.linkedin.com/in/lawrencekourie/">Lawrence Kourie</a>, founder and largest franchisee of Dave’s Hot Chicken, to grow its footprint across the country. Kourie’s experience opening and operating locations in multiple markets will help the brand as it enters new territories."Lawrence has built and operated one of the fastest-expanding restaurant concepts in the country, but what stands out is his disciplined approach to growth and brand integrity," said&nbsp;<a href="https://www.linkedin.com/in/lawrence-longo-342856/?skipRedirect=true">Lawrence Longo</a>, CEO of Prince St. Pizza. "He understands how to develop a concept without losing what made it special in the first place, which is critical as we enter this next phase."The expansion will use Kourie’s existing infrastructure and operations to introduce Prince St. Pizza into new markets. Each location will aim to reflect the same experience as the brand’s original Nolita shop."I have spent years evaluating restaurant concepts, and it is rare to find one that delivers both a strong product and a clear identity," Kourie said. "What Prince St. has built is difficult to truly replicate. The focus now is on growing the brand in a way that preserves that foundation while introducing it to new communities."Kourie is a key operator within the Dave’s Hot Chicken system,&nbsp;<a href="https://1851franchise.com/daves-hot-chicken-sold-to-roark-capital-in-1-billion-deal-to-fuel-global-expansion-2729557#stories">which Roark Capital acquired in a $1 billion deal in 2025</a>. The partnership connects Prince St. Pizza to an operator with experience scaling a brand that has attracted major private equity investment.Read the full article&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Prince St. Pizza is teaming up with a leading Dave’s Hot Chicken franchisee to expand nationwide, tapping proven operator experience to drive growth.

The&nbsp;<a href="https://www.franchise.org/">International Franchise Association</a> has released its annual&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">Franchising Economic Outlook</a> report for 2026, painting the picture for a positive year of growth after notable economic turbulence in 2025.“The resilience of franchising has enabled our model to adapt, endure and thrive in the face of challenging macroeconomic headwinds,”&nbsp;<a href="https://www.linkedin.com/in/matthewhaller">Matt Haller</a>, IFA president and CEO, said in a release. "After a year of recalibration, franchising is better positioned to navigate an improving economic environment than independent businesses due to tax certainty, lower interest rates and investments in AI that will propel brand growth, franchisee unit-level economics and wage growth for the franchise workforce."The report features key industry projections for the year, including:<ul><li>The addition of over 12,000 new franchised businesses</li><li>The addition of over 150,000 jobs — meaning the industry will represent nearly 8.9 million jobs</li><li>An increase in total franchise GDP from $549.9 to $558.4 billion</li><li>An increase in multi-unit ownership as current single-unit franchisees pursue scale</li></ul>In addition to the strength of the industry as a whole, the organization highlighted segment-specific trends.&nbsp;<ul><li>This year, child services and commercial and residential services are recognized as top performers, expected to achieve a 3.2% year-over-year growth rate.</li><li>A focus on experiential dining, rather than value alone, may drive full-service restaurants to outpace quick-service brands in output growth.</li><li>Preventive health care has risen to be the third-largest franchised industry, and it represents strong opportunities as consumer awareness surrounding preventive health care persists.</li></ul>In terms of growth markets, Texas continues to lead the country as the fastest-growing state for franchising, followed by Florida, Georgia, Arizona and North Carolina. Michigan, Ohio and Utah have joined the top 10 this year thanks to their relative affordability and the potential they offer for market leadership and long-term growth.The outlook for 2026 is upbeat, and the drivers behind it look different than they did a few years ago. More brands are putting AI and automation to work in day-to-day operations, which helps franchisees move faster on basics like scheduling and inventory and stay tighter on margins.The growth in multi-unit ownership points to a shift in how people are approaching franchising. More operators are treating it like a scalable investment, focused on building an asset, not just buying themselves a job.As the year ramps up, IFA’s data suggests growth in 2026 will be driven by those leveraging the scale of the franchise model, embracing a tech-forward approach to business ownership, and staying agile in an evolving business landscape.Find the full 2026 Franchising Economic Outlook report&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">here</a>.

Highlighting child services and commercial and residential services as top performers, the organization predicts the industry will add over 150,000 jobs and increase its GDP by billions this year.

IFA Releases 2026 Franchising Economic Outlook Report, Predicting Over 12,000 New Franchised Businesses This Year

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Private equity firm&nbsp;<a href="https://skylineinv.com/">Skyline Investors</a> has acquired rent-to-own franchisor&nbsp;<a href="https://buddysfranchising.com/">Buddy’s Home Furnishings</a> in a deal that signals continued investor confidence in franchise-based retail models, according to a&nbsp;<a href="https://www.retailtouchpoints.com/features/mergers-and-acquisitions/rent-to-own-franchisor-buddys-home-furnishings-purchased-by-private-equity-firm">report from Retail TouchPoints</a>. The transaction, announced Feb. 4, brings new ownership to a system of more than 220 locations across 18 states and Guam, positioning Buddy’s for its next phase of growth within the franchising sector.Financial terms of the deal were not disclosed, but the acquisition reflects a broader trend of private equity firms targeting established franchise brands with recurring revenue and strong unit-level performance. For Buddy’s, which specializes in furniture, electronics and appliances, the partnership is intended to strengthen its operational platform and expand long-term opportunities for franchisees.“This is an exciting new chapter for Buddy’s,” CEO&nbsp;<a href="https://www.linkedin.com/in/michael-bennett-cfe-a9309538/">Michael Bennett</a> said in a statement. “Skyline brings a collaborative mindset that our franchisees and customers will feel immediately. We’re not just changing ownership; we’re gaining committed partners who understand our business, value our franchise network and are ready to invest in our collective success.”Skyline structured the investment alongside&nbsp;<a href="https://www.linkedin.com/in/jeffrey-jaeger-bb48b43/">Jeffrey Jaeger</a> and&nbsp;<a href="https://www.linkedin.com/in/scott-alter-7aa99311/">Scott Alter</a>, co-founders and principals of affordable housing developer&nbsp;<a href="https://standard-communities.com/">Standard Communities</a>. Their involvement adds financial and strategic expertise aimed at supporting capital formation, balance sheet management and disciplined expansion.For franchise operators, the deal offers potential benefits in the form of increased corporate resources, enhanced systems and renewed investment in technology and infrastructure. Private equity-backed franchisors often prioritize scalability, data-driven decision-making and operational consistency, all of which can influence franchisee performance and long-term brand stability.Skyline brings prior experience in the rent-to-own space, including investments in&nbsp;<a href="https://www.gomajik.com/">Majik Rent-to-Own</a>, which may help accelerate Buddy’s development efforts and refine its franchise support model. Company leaders say the firm’s approach is centered on partnership rather than short-term returns.“Buddy’s represents exactly the type of platform opportunity we’re built to support,”&nbsp;<a href="https://www.linkedin.com/in/kevintom/">Kevin Tom</a>, founder and managing partner at Skyline Investors, said in a statement. “With Buddy’s proven brand and strong franchise network, there’s a clear runway for growth.”As private equity continues to expand its footprint in franchising, deals like this highlight the sector’s appeal to institutional investors. For Buddy’s franchisees, the acquisition marks a transition that could shape everything from marketing strategies to multi-unit development in the years ahead, reinforcing the brand’s position in the competitive rent-to-own marketplace.Read the original article&nbsp;<a href="https://www.retailtouchpoints.com/features/mergers-and-acquisitions/rent-to-own-franchisor-buddys-home-furnishings-purchased-by-private-equity-firm">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Buddy's Home Furnishings Acquisition - Skyline Investors - 1851 Franchise

Skyline Investors’ acquisition highlights how rent-to-own operators with dense unit networks and steady demand are drawing long-term capital and operational playbooks.

Buddy’s Home Furnishings Deal Signals More Private Equity Interest in Franchise Retail

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<a href="https://www.jerseymikes.com/franchise">Jersey Mike’s</a> is preparing for a potential initial public offering after confidentially filing an S-1 with the U.S. Securities and Exchange Commission,&nbsp;<a href="https://www.prnewswire.com/news-releases/jersey-mikes-announces-confidential-submission-of-draft-registration-statement-for-proposed-initial-public-offering-302746694.html">according to a recent press release</a>.&nbsp;The brand’s rapid expansion is a key driver behind this decision. Jersey Mike’s has grown from 2,387 locations at the start of 2023 to more than 3,200 stores in early 2026, positioning itself as a serious challenger to&nbsp;<a href="https://1851franchise.com/what-subway-reviews-reveal-about-the-brands-franchise-experience-2729934">Subway</a> in the sub sandwich category. This growth has been further accelerated by&nbsp;<a href="https://1851franchise.com/blackstone-acquires-majority-stake-in-jersey-mikes-signaling-ambitious-growth-plans-2727945">Blackstone's acquisition of a majority stake in 2024</a>.A major differentiator for&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-jersey-mikes-franchise-costs-fees-profit-and-data-2720908">Jersey Mike’s is its strong unit-level performance</a>. The brand reports an average unit volume of about $1.4 million for mature stores, significantly higher than&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-subway-franchise-costs-fees-profit-and-data-2722471">Subway’s estimated $500,000 AUV</a>.&nbsp;While IPO activity was relatively quiet in 2025, the successful public debut of&nbsp;<a href="https://ir.br.coffee/news-releases/news-release-details/black-rock-coffee-bar-announces-closing-initial-public-offering">Black Rock Coffee Bar</a> has raised optimism that more brands could follow. At the same time, several restaurant companies, such as&nbsp;<a href="https://1851franchise.com/dennys-franchise-outlook-triartisan-acquisition-2731234">Denny’s</a>, have moved in the opposite direction, going private or exploring alternatives to avoid public-market pressures.Read the full press release&nbsp;<a href="https://www.prnewswire.com/news-releases/jersey-mikes-announces-confidential-submission-of-draft-registration-statement-for-proposed-initial-public-offering-302746694.html">here</a>.&nbsp;Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

With more than 3,200 locations and backing from Blackstone, Jersey Mike’s positions itself as a top contender for investor interest amid shifting restaurant market dynamics.

How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

How Much Can Franchisees Make? A Guide for Prospective Franchise Owners

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Big O Tires Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Big O Tires is a full-service auto care franchise offering tires, brake repair, alignments, oil changes and preventive maintenance under a nationally recognized brand.

franchise-deep-dive-big-o-tires-franchise-costs-fees-profit-and-data

Franchise Opportunity Deep Dive: A fast-casual restaurant brand serving made-from-scratch sandwiches, salads, soups and pizzas rooted in Southern hospitality.


Newk’s Eatery Franchise Costs, Fees, Profit and Data for 2026

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Visiting Angels Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Visiting Angels is a senior home care franchise focused on in-home support for seniors and individuals with disabilities.

visiting-angels-franchise-costs-fees-profit

BrightStar Care Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: BrightStar Care is a home health care franchise that provides both medical and non-medical services.

franchise-deep-dive-brightstar-cares-franchise-costs-fees-profit-and-data

Amada Senior Care Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Amada Senior Care is a non-medical home care, assisted living placement, and related senior-support services with multiple revenue streams.

How To Read a Franchise Disclosure Document

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