Disclaimer for Earnings Claims

Earnings claims are one of the most regulated parts of franchising by the FTC because they involve any statement about how much money a franchisee might make. An earnings claim includes any comment that suggests income, profit, revenue, or return, even if it is casual or implied. Statements such as “You can make six figures,” “Most owners recoup quickly,” or “You’ll replace your salary” all qualify because they create an expectation about financial performance. Only franchisors are allowed to make these statements, and only when the information appears in Item 19 of the Franchise Disclosure Document. If a franchisor chooses not to include Item 19, then no one is permitted to discuss financial performance at all.

These rules exist to protect candidates from misleading promises and to protect consultants from serious legal consequences. The Federal Trade Commission can impose civil penalties of up to 51,744 dollars per violation, and each unlawful statement can be treated as a separate offense. Violations can also lead to injunctions, bans, and state-level fines. Because financial outcomes depend on many factors such as location, competition, labor markets, and how well the owner executes the model, no consultant can accurately predict what someone will earn. This is why the rules are strict and why consultants must avoid even subtle suggestions about financial results.

Ultimately, financial outcomes can depend on factors no consultant can predict fully including but not limited to: location and territory, local competition, labor market conditions, owner skillset and execution and operational discipline.

How Strive supports you without making earnings claims

  • Teach you how to read Item 19 and understand what’s included and what’s not included

  • Prepare you for franchisee validation calls, where real operators share their experiences

  • Help you compare business models, cost structures, and operational requirements

  • Guide you through questions that uncover risk, working capital needs, and scalability

  • Support you through the entire due‑diligence process without ever making financial promises