Jimmy John’s FDD Item 19 is the section of the Franchise Disclosure Document that provides financial performance representations, the data that tells prospective franchisees what existing locations actually earn. For a brand with approximately 2,700 locations and a total investment of $314,000 to $556,000, Item 19 is arguably the most scrutinized section of the entire FDD. It is also the section most frequently misinterpreted. At Lopes Law LLC, we consistently find that prospective franchisees anchor on the top-line revenue figures in Item 19 without fully accounting for the fee structure disclosed in Item 6, the sourcing costs governed by Item 8, or the territory dynamics described in Item 12. Revenue is not profit. Item 19 tells you what locations earn. The rest of the FDD tells you what you owe.

This guide explains exactly what Jimmy John’s discloses in Item 19, how to properly interpret the financial performance data, why revenue varies significantly by market type, and how to build a realistic profitability model that accounts for the complete cost structure.

What Is FDD Item 19 and What Does It Disclose?

Item 19 of any Franchise Disclosure Document is titled “Financial Performance Representations.” Under the FTC Franchise Rule (16 C.F.R. Part 436), franchisors are not required to include an Item 19. However, if they do include one, the data must have a reasonable basis, be presented in a format that is not misleading, and comply with specific disclosure requirements.

Jimmy John’s does include an Item 19, which means prospective franchisees have access to financial performance data from the system. This is a significant advantage compared to franchise systems that do not provide any Item 19 disclosure, leaving prospective buyers to rely entirely on franchisor validation calls and their own research.

However, what Jimmy John’s Item 19 provides is revenue data, not profitability data. The disclosure typically includes gross sales figures, which may be broken down by categories such as location type, geographic region, or tenure. It does not include cost of goods sold, labor costs, rent, utilities, or net profit figures. The franchisee must construct the profitability picture by subtracting all costs from the revenue data provided.

How Does Jimmy John’s Revenue Vary by Market Type?

One of the most important characteristics of Jimmy John’s Item 19 data is that franchisee revenue varies significantly by market type. This variation is more pronounced for Jimmy John’s than for some other QSR brands because the business model is heavily dependent on specific customer demographics and ordering patterns.

The key factors that drive revenue variation include:

• Proximity to office complexes: Jimmy John’s generates a substantial portion of revenue during the lunch daypart from office workers ordering delivery or picking up sandwiches. Locations near large office complexes or business parks tend to outperform suburban residential locations significantly. The post-pandemic shift to remote and hybrid work has affected this dynamic in some markets.
• University and college proximity: College campuses are among the highest-performing market types for Jimmy John’s. Student populations provide consistent demand during the academic year, particularly for late-night delivery. However, revenue can be seasonal, dropping significantly during summer and break periods.
• Urban density: Locations in dense urban areas can serve more delivery orders per hour due to shorter delivery distances and higher customer density. This translates to higher delivery revenue and better labor efficiency on delivery operations.
• Suburban and rural markets: Locations in spread-out suburban or rural areas tend to have lower delivery volumes because the delivery radius covers fewer potential customers. Dine-in and carry-out may represent a larger share of revenue, but total volumes tend to be lower.
• Competition density: Markets with multiple Jimmy John’s locations or heavy competition from other sandwich brands may show lower per-location revenue due to market fragmentation.

What Does Item 19 Not Tell You?

Understanding the limitations of Item 19 is as important as understanding the data it provides. Here is what Jimmy John’s Item 19 typically does not disclose:

Not Disclosed in Item 19	Why It Matters
Net Profit / Operating Income	Revenue without cost data is incomplete; you cannot determine whether locations are profitable
Food Cost Percentages	Food costs for Jimmy John’s locations are governed by Item 8 sourcing restrictions; you must estimate based on designated supplier pricing
Labor Costs	Labor varies significantly by state, local minimum wage, and delivery-to-pickup ratio; not standardized
Rent / Occupancy Costs	Rent varies by market and is one of the largest operating expenses
Owner-Operator Income	The bottom-line return the franchisee actually takes home is not disclosed
Location-Specific Factors	Delivery radius competition, local market saturation, and nearby closures are not reflected in aggregate data

The gap between Item 19 revenue data and actual profitability is where many prospective franchisees make costly errors in their investment analysis. A location generating $1 million in gross sales may appear attractive until you subtract the 6% royalty ($60,000), 4.5% advertising fund ($45,000), food costs ($280,000 to $320,000), labor ($250,000 to $300,000), rent ($48,000 to $72,000), utilities ($15,000 to $20,000), insurance ($8,000 to $15,000), technology fees ($6,000 to $12,000), and other operating costs. The resulting owner-operator income may be $50,000 to $80,000, a fraction of the gross sales figure. Dickey’s Barbecue Pit recorded 27 SBA loan defaults in a single period, and in many of those cases, franchisees had projected profitability based on revenue figures without fully modeling the cost structure.

How Should You Build a Financial Model from Item 19 Data?

Building a realistic financial model requires combining Item 19 revenue data with cost estimates from multiple sources. Here is the framework we use at Lopes Law LLC when advising clients on Jimmy John’s investments:

Step 1: Select the Right Revenue Benchmark

Do not use the system-wide average. Identify the data segment within Item 19 that most closely matches your proposed location’s market type. If Item 19 breaks data down by region, location type, or tenure, use the most relevant segment. If no segment matches your market, use the median figure for the system, not the average, since the median is less susceptible to distortion from outliers.

Step 2: Apply the Item 6 Fee Structure

Subtract the 6% royalty and 4.5% advertising fund contribution from gross sales. Add estimated technology fees ($500 to $1,000 per month) and insurance costs. This gives you the total franchisor-related fee burden as disclosed in Item 6.

Step 3: Estimate Food Costs

Jimmy John’s food costs are governed by Item 8 sourcing restrictions. Estimate food costs at 28% to 32% of gross sales, based on industry benchmarks for sandwich QSR concepts with mandated supplier pricing. Validate this estimate through franchisee validation calls.

Step 4: Model Labor Costs

Labor costs for Jimmy John’s include in-store sandwich preparation, bread baking (a labor-intensive daily operation), delivery drivers, and management. Estimate labor at 25% to 30% of gross sales, with higher percentages in states with high minimum wages or in markets where delivery represents a larger share of revenue.

Step 5: Include Fixed Operating Costs

Add rent (typically $4,000 to $6,000 per month for a standard Jimmy John’s location, varying by market), utilities ($1,200 to $1,800 per month), maintenance, and miscellaneous operating expenses.

Step 6: Calculate Operating Income

The resulting figure is your estimated operating income before debt service, taxes, and owner compensation. This is the number that determines whether the investment meets your financial objectives.

Why Do Franchisee Validation Calls Matter for Item 19 Analysis?

Item 19 provides the franchisor’s officially disclosed financial data. Franchisee validation calls provide the real-world context that makes that data meaningful. During validation calls with current Jimmy John’s franchisees, prospective buyers should ask:

• Actual food cost percentage: What percentage of gross sales goes to food and paper products purchased through the designated supply chain?
• Labor cost percentage: What does labor actually cost as a percentage of sales, including bread baking labor?
• Delivery versus in-store mix: What percentage of revenue comes from delivery versus carry-out versus dine-in, and how does the delivery mix affect profitability?
• Revenue trends: Has revenue been increasing, stable, or declining over the past three years? Have office occupancy patterns or delivery competition affected trends?
• Technology fee trajectory: Have technology fees increased since Inspire Brands acquired the brand?
• Owner-operator income: What does the franchisee actually take home after all expenses, and is that figure consistent with what Item 19 data would suggest?

Franchisors are required to provide a list of current and former franchisees in Item 20 of the FDD. Use that list to conduct thorough validation, focusing on operators in markets similar to your proposed location. The Patrice & Associates franchise recruiting data showing a 31% failure rate across franchise placements highlights the importance of going beyond FDD data to understand real-world operating economics.

How Does the Inspire Brands Ownership Affect Item 19 Interpretation?

Since Inspire Brands acquired Jimmy John’s in 2019, the financial performance landscape has evolved. Several factors related to the Inspire ownership are relevant when interpreting Item 19:

• Technology investment: Inspire has invested in digital ordering, delivery optimization, and loyalty programs. These investments may be reflected in improving revenue trends at some locations, but the associated technology fees affect profitability.
• Cross-brand marketing: Inspire’s portfolio marketing capabilities may drive awareness and traffic that benefits Jimmy John’s, though the effect on individual locations varies.
• Supply chain changes: Inspire’s cross-brand purchasing power may affect supplier pricing over time, which could influence food costs positively or negatively depending on how savings are shared with franchisees.
• Market strategy: Inspire’s growth strategy for the Jimmy John’s brand, whether focused on new unit development, same-store sales growth, or both, affects the competitive landscape and revenue potential for individual locations.

At Lopes Law LLC, we advise clients to examine Item 19 data trends over multiple FDD years when available. Comparing the most recent year’s data to prior years can reveal whether the Inspire acquisition has positively or negatively affected unit-level revenue. If you are already a Jimmy John’s franchisee and your financial performance does not match what Item 19 data suggested, our franchise exit audit can help you evaluate your options.

A Client Scenario: When Item 19 Data Told Only Part of the Story

A prospective franchisee came to our firm after reviewing Jimmy John’s FDD and fixating on the average gross sales figure in Item 19. The buyer was evaluating a location in a suburban market and had projected annual revenue of approximately $950,000 based on the system-wide average.

When we reviewed the Item 19 data more carefully, we identified that the average was significantly skewed by high-performing urban and university locations. The median figure was meaningfully lower, and the data for suburban locations in comparable markets suggested revenue closer to $750,000 to $850,000.

Using the lower revenue estimate and applying the full cost structure, including the 6% royalty, 4.5% advertising fund, 30% food costs, 28% labor costs, $5,500 monthly rent, and ancillary operating expenses, the projected owner-operator income dropped from approximately $90,000 (based on the $950,000 revenue assumption) to approximately $35,000 to $50,000 (based on the $750,000 to $850,000 range). For a total investment of $420,000, the lower-end return raised serious questions about whether the investment met the buyer’s objectives.

We conducted validation calls with four existing Jimmy John’s franchisees in comparable suburban markets. Two reported revenue in line with the lower estimate, one reported revenue slightly above, and one had closed within the prior year due to insufficient volume. This validation data, combined with the adjusted Item 19 analysis, gave the buyer a realistic picture that the FDD’s headline average did not provide.

Why Legal Review of Item 19 Is Essential

Item 19 data, when properly interpreted, is one of the most valuable tools in the franchise due diligence process. When misinterpreted, it can create a false sense of financial security that leads to an undercapitalized investment in an underperforming market.

A franchise attorney can help you identify the data segments most relevant to your market, cross-reference Item 19 revenue with Item 6 fees and Item 8 sourcing costs to build a complete financial model, flag statistical issues like averages skewed by outliers, guide your franchisee validation process to verify the data, and compare the unit economics against other franchise opportunities.

At Lopes Law LLC, we review Jimmy John’s FDDs and franchise agreements regularly. Our flat-fee FDD validation review is $3,000 and covers all 23 items of the FDD, with particular emphasis on the interplay between Item 19 revenue data, the fee structure in Item 6, and the renewal and exit provisions in Item 17.

Frequently Asked Questions About Jimmy John’s FDD Item 19

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Last updated: March 11, 2026