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A spreadsheet or conversation can carry the claim
The federal definition covers oral, written and visual statements and mathematical calculations about the specified actual or potential sales, income, gross profit or net profit. Calling a figure illustrative does not decide its treatment.
An internal planning model and a recruitment pitch have different audiences. Before using figures with prospects, the representation needs its applicable reasonable basis, written support and disclosure treatment. Brokers and other sellers cannot be left to improvise different claims.
Fictional example: US$1 million in Singapore
A cleaning brand puts a Singapore outlet’s annual revenue, equivalent to US$1 million, beside a U.S. territory map. Correct currency conversion does not establish what a U.S. operator will sell or keep as profit.
The period, customer mix, included and excluded outlets and omitted costs all matter. U.S. management pay, insurance, collections and local sales costs may differ. One strong outlet can also misrepresent the wider group. The meaningful question is what the prospect will infer and whether the evidence supports that message.
Not making a claim still requires an Item 19 answer
A franchisor can elect not to make a financial performance representation, but must give the prescribed negative Item 19 disclosure. That choice does not permit financial-result claims privately or elsewhere in the sales process.
The rule’s specific-outlet-record and compliant supplemental-representation routes have their own conditions. They are not permission to give any figures off-document. Written supporting material alone does not replace the required treatment.
Scope
- No source result or projection is approved here. Independent state requirements and the exact conditional disclosure routes remain separate.
Next step
Compare what the prospect would understand with what the actual data supports before using home-market results in recruitment.
Sources & review notes
Federal Trade Commission
Passage, dates and research notes
primary · section-436.1
whatever it may be called
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 · 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 · section-436.6
Respond fully to each disclosure Item.
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Detailed rule records (1)
A franchise seller’s financial performance representations generally require a reasonable basis, written substantiation and Item 19 disclosure under the applicable rule. Item 19 must be answered even if the franchisor elects not to make a financial performance representation.
16 CFR §436.9: Franchise-sales prohibitions 16 CFR §436.6: FDD preparation and recordsKeep this reading in your learning library.
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