The Item 19 Financial Performance Representation in your Franchise Disclosure Document (FDD) is one of the most scrutinized sections by prospective franchisees. It tells them what kind of financial performance they can expect as a franchisee in your system.
Processing fees directly affect the numbers in your Item 19. Eliminating them through Network Offset Pricing doesn't just save money — it makes your franchise opportunity more attractive to candidates.
The Item 19 Impact
Consider a QSR franchise with these unit economics:
| Line Item | Before NOP | After NOP |
|---|---|---|
| Average Unit Revenue | $960,000 | $960,000 |
| COGS (32%) | -$307,200 | -$307,200 |
| Labor (28%) | -$268,800 | -$268,800 |
| Occupancy (10%) | -$96,000 | -$96,000 |
| **Processing Fees** | **-$24,000** | **~$0** |
| Other Expenses | -$192,000 | -$192,000 |
| **Unit EBITDA** | **$72,000** | **$96,000** |
EBITDA improvement: +33% — from eliminating a single line item.
What Prospective Franchisees See
Franchise candidates evaluate:
- Cash-on-cash return — Higher EBITDA means faster ROI on their investment
- Breakeven timeline — $24,000/year in savings accelerates breakeven
- Validation calls — Existing franchisees report better margins
- Competitive comparison — Your FDD shows stronger unit economics than systems still paying processing fees
How It Affects Franchise Development
Stronger Item 19 financials lead to:
- More qualified franchise candidates
- Faster deal velocity (less financial hesitation)
- Better validation (happier existing franchisees)
- Higher franchise fee justification
- Stronger multi-unit development agreements
Implementation Through PaySec
One franchisor decision implements Network Offset Pricing across the entire network. PaySec provides:
- Single partnership agreement
- Phased deployment to all locations
- Centralized reporting dashboard
- Compliance management across jurisdictions
The Item 19 improvement begins as soon as the first locations are live.
Anthony R. specializes in payment processing for franchise systems and multi-location businesses. He spent a decade in franchise development consulting and now writes about how franchise operators can standardize payment strategies across locations.
$72,000
| $96,000 |
Get Started
The first step to reducing your processing costs is understanding exactly what you are paying today. Request a free statement analysis and we will show you a side-by-side comparison of your current costs versus what you could save with Network Offset Pricing.