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What target 20% leaves unanswered
A fictional technical-services brand has one home-country unit with a 20% operating margin. Its U.S. deck says target 20%. The new word does not show why a U.S. operator could achieve that result, what costs were included or how representative that unit was.
Not every brand message is a financial performance representation. Where the message is one, the applicable reasonable basis, written support and disclosure requirements must be satisfied. Compare the actual statement with Item 19, the FDD’s financial-performance section. A disclaimer does not cure a contradiction with required disclosure.
Keep the meaning attached to the figure
Revenue and profit are different. The period, geography, included and excluded units, operating model and omitted costs can change what a figure tells the buyer. A successful home-market outlet does not alone justify a U.S. performance claim.
Testimonials need attention too, including incentives given to references and any claim that a reference is independent. Save the advertisement in the form actually used—not just an isolated number.
Correct every live version
If the underlying information changes, find the slides, landing pages, scripts and broker material using it. Updating your master deck leaves the old message in circulation if a broker still uses a previous copy.
Scope
- No advertisement is approved here. State advertising filings, required wording, broker rules and sales authority remain separate.
Next step
Decide whether the proposed message has the necessary support and disclosure treatment before publishing it; withdraw superseded copies.
Sources & review notes
Federal Trade Commission
Passage, dates and research notes
primary · section-436.9
reasonable basis and written substantiation
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Federal Trade Commission
Passage, dates and research notes
primary · Item 19: Financial performance representations
reasonable basis and written substantiation for the representation at the time the representation is made
Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.
Federal Trade Commission
Passage, dates and research notes
primary · section-436.7
within 120 days
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Detailed rule records (1)
Section 436.9 prohibits franchise sellers from claims that contradict required disclosures and from financial-performance representations that do not meet its basis, substantiation and disclosure conditions.
16 CFR §436.9: Franchise-sales prohibitions 16 CFR §436.5(s): FDD Item 19 16 CFR §436.7: FDD annual and quarterly updatesRelated case records
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