Jersey Mike’s FDD Item 19 is the section of the Franchise Disclosure Document that contains financial performance representations — the actual revenue data from existing franchise locations. For prospective franchisees evaluating a total investment of $235,794 to $766,380, Item 19 is the closest thing to a financial road map the FDD provides. At Lopes Law LLC, we consider Item 19 the single most important section of the FDD for investment analysis, but only when it is read in context with the fee obligations in Item 6 and the operating constraints in Item 8.

This guide explains what Jersey Mike’s discloses in Item 19, how to properly evaluate the financial performance data, why the numbers alone do not tell the full story, and how the approximately $8 billion Blackstone acquisition in 2024 affects the outlook for franchisee profitability.

What Is FDD Item 19 and Why Does It Matter?

Item 19 of any Franchise Disclosure Document is titled “Financial Performance Representations.” It is the only section of the FDD where a franchisor can provide historical revenue, cost, or profit data about its franchise locations. Under the FTC Franchise Rule (16 C.F.R. Part 436), franchisors are not required to include Item 19 data. Approximately 63% of franchise systems choose to provide some form of financial performance representation, and Jersey Mike’s is among them.

The fact that Jersey Mike’s includes Item 19 data is generally a positive signal. It suggests the brand has performance data it is willing to share publicly. However, what the data includes, what it excludes, and how it is presented all matter enormously. A headline average gross sales figure can be misleading if you do not understand the distribution behind it, the operating costs not disclosed, and the fee obligations in Item 6 that must be subtracted.

What Financial Data Does Jersey Mike’s Item 19 Include?

Jersey Mike’s Item 19 typically provides gross sales data for franchised locations. The presentation format varies by FDD year but generally includes:

• Average gross sales: The mean revenue across reporting locations.
• Median gross sales: The midpoint where half of locations perform above and half below.
• Quartile or tier breakdowns: Performance segmented by volume level, showing how top performers, middle performers, and lower performers compare.
• Number and percentage of locations meeting or exceeding the average: This reveals how representative the average actually is.

What Item 19 typically does not include is equally important: net profit or owner’s discretionary earnings, complete operating expense breakdowns, individual location-level data, projections or forward-looking estimates, and data for locations that closed during the reporting period.

How Should You Evaluate Jersey Mike’s Item 19 Data?

Evaluating Item 19 requires a structured analytical approach. Here is the framework we use at Lopes Law LLC:

Step 1: Focus on Median, Not Average

The median tells you what the typical location earns. If the median is significantly lower than the average, it means a small number of high-performing locations are pulling the average up. Your first-year location is statistically more likely to perform near the median than the average.

Step 2: Subtract All Item 6 Fees

Take the gross sales figure and subtract every fee disclosed in Item 6: the 6.5% royalty, advertising contributions, technology fees, and other ongoing obligations. This gives you the revenue available to cover operating expenses. For a location generating $1 million in annual gross sales, the Item 6 fees can total $109,000 to $157,000 before any operating expenses.

Step 3: Model Realistic Operating Expenses

Build a complete operating expense model including food costs (typically 28% to 32% for a sub shop with premium ingredients), labor costs (typically 25% to 30% including payroll taxes and benefits), occupancy costs (rent, utilities, property taxes), insurance, supplies, and maintenance. For a hypothetical $1 million location:

Expense Category	Percentage of Sales	Annual Amount
Gross Sales	100%	$1,000,000
Item 6 Fees (all-in)	~11-16%	$109,000 – $157,000
Food Cost	~30%	$300,000
Labor	~28%	$280,000
Occupancy (rent/utilities)	~10%	$100,000
Other Operating Costs	~5%	$50,000
Estimated Owner Cash Flow	~0-16%	$13,000 – $161,000

The range is wide because the actual performance depends heavily on local labor costs, real estate costs, food cost management, and operational efficiency. This is why you cannot rely on Item 19 alone — you must model the complete economics for your specific market.

Step 4: Calculate Return on Investment

With a total investment of $235,794 to $766,380, calculate how long it will take to recoup your investment at various profitability levels. If your projected annual cash flow is $75,000 and your total investment is $500,000, the payback period is approximately 6.7 years on a 10-year agreement.

Step 5: Compare to Alternative Investments

A $500,000 investment in a Jersey Mike’s franchise that returns $75,000 per year represents a 15% return on invested capital before debt service. Compare this to other franchise opportunities, passive investments, or small business acquisitions to determine whether the risk-adjusted return is competitive.

What Does Item 19 Not Tell You?

Item 19 has significant limitations that every prospective franchisee must understand:

• No net profit data: Most Item 19 disclosures report gross sales only. The gap between gross sales and what the owner takes home can be enormous.
• Survivorship bias: Item 19 data typically includes only locations that operated for the full reporting period. Locations that closed during the period — potentially because they were unprofitable — may be excluded, which skews the data upward.
• No market-specific data: The national average may not reflect the economics of your specific market. A location in Manhattan has different revenue potential and cost structure than a location in a rural town.
• Historical, not predictive: Item 19 reflects what happened in the reporting period. It does not predict what will happen in your first year, especially in a new market or with a new operator.
• No disclosure of closed locations: The number of locations that opened and subsequently closed is disclosed in Item 20, not Item 19. Cross-referencing both items provides a more complete picture.

How Does the Blackstone Acquisition Affect the Financial Outlook?

Blackstone’s approximately $8 billion acquisition of Jersey Mike’s in 2024 creates both opportunities and risks for franchisee financial performance.

Potential positives: Blackstone’s capital and operational expertise could accelerate brand awareness through increased marketing spend, improve supply chain efficiency, invest in technology that drives higher average ticket sizes, and expand into new markets that grow overall brand value.

Potential risks: Private equity ownership often introduces cost pressures that can reduce franchisee margins even when top-line revenue grows. New technology fee requirements, expanded advertising fund obligations, mandatory store upgrades, and new vendor programs can all increase the franchisee’s cost structure. The Item 19 data in the current FDD reflects pre-acquisition performance and may not predict post-acquisition economics.

The franchise industry offers relevant precedent. When private equity firms acquired other QSR franchise systems, franchisee margins sometimes declined even as system-wide sales grew. The franchisor’s interests and the franchisee’s interests are not always aligned, particularly when the franchisor is focused on maximizing system-wide revenue to generate returns for investors.

SBA loan data showed that Dickey’s Barbecue Pit had 27 SBA loan defaults, illustrating what happens when the gap between revenue expectations and actual profitability becomes too wide. Research from Patrice & Associates documented a 31% failure rate among franchise businesses, with unrealistic financial expectations being a contributing factor. If you are evaluating a franchise and want to understand the risks before committing, review our franchise exit audit guide to understand your options.

How Does Jersey Mike’s Item 19 Compare to Competitors?

Comparing Item 19 data across franchise systems requires careful normalization. Different brands report different metrics, and the investment levels vary significantly. Key comparison factors include:

• Average unit volume relative to total investment: Higher average sales are only meaningful if the investment required to achieve them is proportionally reasonable.
• Fee burden as a percentage of gross sales: Jersey Mike’s 6.5% royalty plus advertising versus competitors’ fee structures determines how much revenue remains for operating expenses and profit.
• Percentage of locations meeting or exceeding the average: A system where 60% of locations exceed the average is fundamentally different from one where only 35% do.
• Growth trends: Is the average increasing or decreasing year over year? Stagnant or declining averages may indicate market saturation or competitive pressure.

Why Legal Review of Item 19 Is Essential

Item 19 data is the foundation of your investment analysis, but interpreting it correctly requires legal and financial expertise. A franchise attorney can help you understand the methodology behind the calculations, identify what data is included and excluded, model the impact of Item 6 fees on the revenue figures, compare the financial performance to your total investment, and evaluate whether the projected returns justify the risk.

At Lopes Law LLC, our flat-fee FDD validation review is $3,000 and covers all 23 items of the FDD. Our Item 19 analysis includes a detailed financial model that combines the disclosed performance data with the fee obligations in Item 6, the sourcing constraints in Item 8, and realistic operating cost estimates for your specific market.

Frequently Asked Questions About Jersey Mike’s FDD Item 19

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Last updated: March 11, 2026