What is the purpose of including financial statements in the Dryer Vent Squad FDD?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.
We currently require all franchise owners to provide periodic revenue and other financial reports concerning their Franchises (They provide it through direct requests by our corporate team, or through the CRM system that they are required to report their monthly financial reports). In early 2024 we reconciled the revenue and other information provided by the franchisees relating to the operation of their Dryer vent Squad Business during 2023. We have presented 2023 financial information from 21 franchisees (the "Represented Franchise Owners") who collectively own 32 Dryer Vent Squad Businesses (the "Represented Franchises"), who have owned their businesses at least one (1) year as of December 31, 2023, and operated those franchises throughout all of 2023. We excluded 14 territories from this Item 19 that did not meet the criteria.
The Represented Franchise Owners have been in business for an average of 1.5 years in their markets and operate in a mix of urban, suburban, and rural areas, disbursed geographically throughout the U.S. Some operate on a parttime basis; however, all offer the same products and services that we authorize new Dryer Vent Squad Businesses to sell.
In the below charts, we present the historical financial performance of the Represented Franchise Owners during the one (1) year period from January 1, 2023, to December 31, 2023 (the "Measurement Period"). Each category in the charts is defined in more detail in the notes below the charts.
In the below charts, we present the average and median revenue of the Represented Franchise Owners divided into quartiles, and the top and bottom five percent (5%) of Represented Franchise Owners during the Measurement Period.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 50–51)
What This Means (2024 FDD)
According to Dryer Vent Squad's 2024 Franchise Disclosure Document, Item 19 permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. This allows prospective franchisees to evaluate the potential financial viability of a Dryer Vent Squad franchise.
The inclusion of financial performance representations in Item 19 is contingent upon the franchisor having a reasonable basis for the information provided. Dryer Vent Squad franchise owners are required to provide periodic revenue and other financial reports concerning their franchises. In early 2024, Dryer Vent Squad reconciled the revenue and other information provided by the franchisees relating to the operation of their Dryer Vent Squad Business during 2023. The FDD presents 2023 financial information from 21 franchisees who collectively own 32 Dryer Vent Squad Businesses, who have owned their businesses at least one year as of December 31, 2023, and operated those franchises throughout all of 2023. 14 territories were excluded from Item 19 because they did not meet the criteria.
The financial data presented is historical, covering the one-year period from January 1, 2023, to December 31, 2023. The FDD includes the average and median revenue of the Represented Franchise Owners divided into quartiles, and the top and bottom five percent (5%) of Represented Franchise Owners during the Measurement Period. This information helps potential franchisees understand the range of financial outcomes achieved by existing Dryer Vent Squad franchisees.
It's important to note that financial performance information differing from Item 19 may be given only if a franchisor provides the actual records of an existing outlet you are considering buying, or supplements the information provided in Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. This ensures that any additional financial information is properly contextualized and supported.