How to read Item 19 without fooling yourself

Item 19 is the financial performance representation. It is the closest thing you will get to an answer to the question everyone actually has: how much will I make?

It is also the easiest section to misread.

Check what is being measured

Some brands report gross sales. Some report gross profit. A few report something close to owner earnings. Those are very different numbers. A store that does $1.2 million in sales can still pay its owner less than a good salaried job.

Check who is in the sample

Look for the footnotes. Is the average based on all units, or only the ones open more than two years? Are company-owned stores mixed in? Did they leave out the bottom quartile? None of that is hidden. It is just in small print.

Check the median, not the average

One very strong location can pull an average way up. The median tells you what the typical owner is living with.

When I owned Edible Arrangements stores, our numbers were near the top of the system. That is exactly why I tell people not to plan around numbers like mine. Plan around the middle.