2020 has been a year filled with challenges, so-called "new norms", and an avalanche of confusing & conflicting information regarding the franchise industry. One of the most concerning and very often asked questions of late is; "How do we report sales and other costs in the Item 19 section of our FDD for this year's renewal?".
Obviously, 2020 unit-level sales may not be representative of your operations in other more normal years. Many of you have struggled with low sales while some of you have had record breaking high sales... Covid 19 has wreaked havoc on the sales results of so many franchised businesses and what & how you report those results will impact your franchise sales effort. So how do you represent your units' sales performance without misleading your prospects? Some Franchisors are considering not disclosing sales in Item 19. As you might imagine, there are many opinions on that topic as it relates to the selling process.
Many states have already started to put new guidelines & restrictions in place regarding what you may disclose and how it is to be written into your FDD. It is all very confusing, yet very important to many Franchisors that decide to disclose certain financial performance indicators in their ITEM 19.
In an effort to address this very important topic, Franchise Growth Solutions is sponsored an invitation only ROUNDTABLE DISCUSSION for Franchisors and their financial staff. The goal of the Webinar was to address some of the many questions surrounding this issue.
Our Guest Experts are:
Tom Spadea - Spadea Lignana. Tom Spadea spent more than 15 years in corporate and entrepreneurial positions before completing law school at Temple University Beasley School of Law. www.spadealaw.com
Michael Iannuzzi - Partner & Co-Leader - Citrin Cooperman's Franchise Practice. Michael Iannuzzi is a partner and co-leader of the firms franchise practice providing audit and accounting, business consulting and advisory, and tax planning services to a wide spectrum of clients within the franchise community. www.citrincooperman.com
These two industry experts will give us an overview on the issue and how we may tackle the question of Item 19 disclosure. In addition, we'll hear your thoughts and take your questions regarding the issues we'll face regarding Item 19.Whether you are a first time Franchisor filing for the first time or filing your annual renewal, I urge you to join us and participate. Additionally, I cannot emphasize enough the importance of getting focused on this now...
Don't wait until mid-March to begin the renewal process and then deal with this issue. As you know many of the registration states are slow to examine FDD renewals in normal times, if you file your renewal late you run the risk of losing many selling months and you won't be able to sell in some Registration States (IE: California, New York, Maryland, etc).
I truly hope you find this Webinar helpful