---
title: "Check financial performance representations against Item 19"
url: "https://ailawframework.com/practice/franchising-and-distribution/check-investment-earnings-claim-and-return-disclosures-in-the-pack/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A34-T1-R6-US"
practice_area: "Franchising & Distribution"
tier: "red"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Check financial performance representations against Item 19

> List every sales, income, gross-profit or net-profit figure in the draft or the sales pack, the page, and whether it appears in Item 19. Collect the documents the draft cites as support. Write no earnings sentence.

Canonical page: https://ailawframework.com/practice/franchising-and-distribution/check-investment-earnings-claim-and-return-disclosures-in-the-pack/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Franchising & Distribution](https://ailawframework.com/practice/franchising-and-distribution.md) |
| Human involvement | Red: Lawyer writes; AI may check, clarify or collect data |
| How AI is used | List every sales, income, gross-profit or net-profit figure in the draft or the sales pack, the page, and whether it appears in Item 19. Collect the documents the draft cites as support. Write no earnings sentence. |
| What the lawyer must review | 16 C.F.R. § 436.1(e) defines a financial performance representation to include an oral, written or visual representation of a specific level or range of actual or potential sales, income, gross profits or net profits. Section 436.5(s) and § 436.9(c) require a reasonable basis and written substantiation when the representation is made, and require it to be in Item 19. Section 436.9(d) requires that substantiation be made available to the prospective franchisee and to the Commission on reasonable request. You decide whether the basis is reasonable. A new franchisee's results may differ; the rule requires that admonition. |
| Written for | United States |
| Applies to | [Check investment, earnings-claim and return disclosures in the pack](https://ailawframework.com/practice/franchising-and-distribution/check-investment-earnings-claim-and-return-disclosures-in-the-pack.md) |

## Checking plan

- What the AI does: List every sales, income, gross-profit or net-profit figure in the draft or the sales pack, the page, and whether it appears in Item 19. Collect the documents the draft cites as support. Write no earnings sentence.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- A supplemental representation about a particular location has its own conditions in § 436.5(s)(5), including an explanation of the departure from Item 19.
- If Item 19 is blank, the prescribed statement that the franchisor does not make a financial performance representation still has to be checked.

## Sources

- [16 C.F.R. §§ 436.1(e), 436.5(s) and 436.9(c)-(d)](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436) (checked 2026-10-22)
- [FTC: Franchise Rule](https://www.ftc.gov/legal-library/browse/rules/franchise-rule) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*