RobotLAB’s Item 19 Problem - When Revenue Promises Meet Franchise Law
The Tip That Started It
After publishing yesterday’s Reality Check Report on RobotLAB, my inbox lit up.
Franchisees, insiders, and even a few prospective investors reached out, all asking the same question: “Are you going to cover Item 19?”
It turns out, that was the missing piece everyone wanted to talk about. What started as a handful of follow-up messages quickly snowballed into a flood of documents, screenshots, and firsthand accounts; enough to warrant a full-blown investigation of its own.
The more I reviewed, the clearer it became: RobotLAB’s financial performance claims weren’t just optimistic, they were potentially unlawful.
This follow-up takes a closer look at the sales materials,* Franchise Disclosure Documents (FDDs) from 2023 through 2025, and the earnings promises made to buyers that never should have been made at all.
When a Sales Pitch Becomes a Violation
At the heart of every franchise sale is the Franchise Disclosure Document, a federally required set of 23 items designed to protect buyers from misinformation.
Item 19, Financial Performance Representations, is one of the most critical. It’s where franchisors can (if they choose) disclose actual or projected sales, expenses, or profits from company or franchised outlets.
But here’s the catch:
If a franchisor does not include Item 19 data, they are prohibited by law from making any representations, verbal or written, that suggest how much a franchisee might earn.
That’s not a gray area. It’s black and white. And RobotLAB ignored it.
The 2024 Sales Deck: $1 Million in Year One
On page 14 of RobotLAB’s 2024 franchise sales presentation,* prospective buyers are shown a bold financial projection:
“Target Revenues Per Territory: $1,000,000 (Year 1)
$3,000,000 (Year 3)”
Beneath it, the slide breaks down how those targets were calculated:
Average invoice: $16,600
62 invoices per year
Three contiguous territories recommended for growth
On its face, this is a textbook financial performance representation. It quantifies expected sales, volume, and growth. It gives an impression of achievable results. It also directly links revenue potential to territory development, a subtle way of upselling buyers into purchasing more units.
There’s just one problem.
The 2024 FDD, dated April 19, 2024, explicitly states:
“We do not make any financial performance representations about a RobotLAB franchise. If you receive any financial performance information or projections from any source, you should report it to our management, the Federal Trade Commission, and the appropriate state regulatory agencies.”
In other words: RobotLAB was making financial claims it legally disclaimed making.
And the numbers weren’t small, they were multimillion-dollar promises.
What the FDD Actually Said (2023–2024)
To understand how serious this is, it helps to look at the pattern.
2023 FDD:
RobotLAB had no Item 19. The company was new to franchising, with only a handful of outlets. Like most emerging brands, it told buyers nothing about revenue or profitability. Yet 2023 is the date stamped on every page of the sales document.
2024 FDD:
Still no Item 19. The document repeats the same boilerplate:
“We do not make any financial performance representations.”
At the very same time, RobotLAB’s sales presentation was being circulated with specific revenue targets ($1M–$3M), invoice volumes, and margins labeled “100%.”
That’s not an oversight, that’s a pattern of misrepresentation considering they likely used the same presentation deck in both years.
2025 FDD:
RobotLAB finally adds an Item 19 but not the kind buyers would expect. Instead of showing actual franchise-level performance, the franchisor discloses invoice-level data from just 13 locations:
Average invoice: $26,042
Median invoice: $7,320
Average margin: 57%
Royalties and fees deducted before payment to franchisees
Notably, 41 of the 81 invoices came from warranty transfers from the corporate affiliate and not direct sales to customers. And the disclosure excludes franchisees who made no sales, artificially inflating the averages.
So while RobotLAB’s 2025 FDD suddenly introduces a set of financial “facts,” they come after two years of marketing promises that never should have been made in the first place.
What the Law Says
The FTC Franchise Rule and state franchise laws are clear:
That prohibition extends to slides, brochures, videos, and website materials used in franchise sales.
By issuing an FDD with no Item 19 while simultaneously distributing a deck promising $1 million in year one and $3 million by year three, RobotLAB may have committed a material violation of the Franchise Rule.
Such violations can lead to:
Regulatory action (civil penalties, rescission, or enforcement orders)
Private franchisee claims for misrepresentation or fraud
Mandatory rescission rights in registration states like California, Illinois, or New York
The Numbers That Don’t Add Up
Let’s unpack those “targets” RobotLAB presented.
If each territory were to reach $1,000,000 in the first year from 62 invoices averaging $16,600, that implies:
More than one robot sale every six days per territory
An average sale price above the median invoice value reported a year later in the 2025 FDD
A sales velocity that even the franchisor itself couldn’t achieve systemwide
The 2025 FDD shows only 81 invoices total across 13 locations in the entire system, or roughly 6 per franchise for the year. That’s not 62 invoices per year, it’s a tenth of that volume.
In other words, RobotLAB’s own data contradicts its earlier promises by a factor of ten.
Even worse, the 2025 data shows most of those invoices were corporate-to-franchise warranty transfers; not actual customer sales. So the million-dollar targets promoted in 2023 and 2024 appear to have had no factual basis at all.
A Franchise Built on Internal Revenue
The inconsistency isn’t limited to earnings claims.
In both 2024 and 2025, RobotLAB’s Item 8 disclosures show the franchisor deriving the vast majority of its income from selling robots and software to its franchisees not from royalties on end-customer sales.
2023 FDD: 73% of franchisor revenue from required franchisee purchases
2024 FDD: 75.6%
2025 FDD: 81%
That’s not the trajectory of a growing consumer demand business it’s the hallmark of a system sustaining itself by selling inventory to its own operators.
When a franchisor’s primary source of revenue is its franchisees rather than their customers, the risk of inflated Item 19 claims skyrockets. Because every new territory sold, and every robot “starter pack” ordered, becomes the franchisor’s lifeline even if end-user demand is flat.
“100% Margin”: The Most Dangerous Claim of All
The 2024 sales presentation doesn’t stop at revenue targets.
It goes on to promise “100% margin” on warranty services, software, and content creation. In reality, that statement conflicts directly with RobotLAB’s later disclosures that:
Royalties (11%) and transaction fees are deducted from all sales before franchisees are paid.
Technology fees rose from $485 per person/month in 2024 to $794 plus $161 per person in 2025 with the right to increase 50% annually.
Hardware markups by corporate averaged 30–40%, according to insiders.
There’s no such thing as 100% margin when the franchisor is taking a cut on every transaction and controlling all supply chains.
This “margin claim” isn’t just misleading, it’s potentially fraudulent under franchise disclosure law.
When Aspirations Become Obligations
One of the most troubling patterns in RobotLAB’s documents is how the company’s marketing “targets” became contractual obligations.
The same revenue numbers from the sales presentation ($1M in Year 1, $3M in Year 3) later appear in the 2024 Franchise Agreement as Mandatory Minimum Performance Standards. Franchisees who fail to meet them risk losing territory rights or facing termination.
That’s not aspirational. That’s coercive.
Franchisees who bought based on the sales deck may have believed those numbers were realistic projections only to find them codified later as binding performance quotas they had little chance of meeting.
What This Means for Franchisees
If you invested in a RobotLAB franchise using the 2023 or 2024 FDD, here’s what you should know:
Any revenue or margin claims not disclosed in Item 19 may constitute a violation of the FTC Franchise Rule.
Franchisees in registration states (California, Minnesota, Wisconsin, Indiana, Washington, New York, etc.) may have rescission rights if the omission or misrepresentation was material to their purchase.
Evidence matters. Keep copies of every presentation, brochure, and email from the sales process. Even a single slide promising “$1M in Year 1” can establish an unlawful earnings claim.
You’re not alone. Multiple franchisees have already raised similar concerns and the consistency of their experiences may strengthen potential claims.
Lessons for Everyone Else
RobotLAB’s case is a masterclass in how emerging franchisors misuse Item 19:
They start with no Item 19 to avoid the burden of proof.
Then they distribute “illustrative” revenue slides through brokers or sales reps.
When challenged, they hide behind disclaimers or point to affiliate data.
Later, they roll out a sanitized Item 19 filled with invoice-level figures that obscure the real economics.
It’s a sequence that repeats across many “hot new” franchise concepts and it’s why due diligence must always include comparing marketing materials against the actual FDD on file.
The Bigger Pattern Emerging
RobotLAB’s Item 19 violations aren’t an isolated issue. They’re part of a broader pattern of transparency failures:
A lawsuit filed before the 2025 FDD but not disclosed in Item 3.
Closures and transfers allegedly postponed to avoid Item 20 reporting.
A franchise system where revenue depends on franchisee purchases, not end-customer demand.
The Item 19 story ties it all together: a company selling a dream of million-dollar revenue while struggling to sell even a handful of robots.
The Bottom Line
RobotLAB sold a vision of “owning the future.” What many franchisees got was a system anchored in misleading projections, inflated margins, and undisclosed legal risks.
The $1M–$3M targets, the 100% margin claims, and the invoice-based Item 19 that followed all point to a franchisor playing fast and loose with financial representations, all at the expense of its operators.
If those claims were used to close franchise sales under FDDs that expressly disclaimed any Item 19, that’s not just aggressive marketing. It’s a potential violation of federal franchise law.
*The financial projections and marketing claims discussed in this report come from a sales presentation provided to prospective RobotLAB franchisees during the 2024 franchise recruitment process. These materials were distributed as part of the company’s normal franchise sales communications and not under any nondisclosure or confidentiality agreement. Franchise Reality Check™ reviewed the content for accuracy and consistency against RobotLAB’s 2023–2025 Franchise Disclosure Documents. Portions are reproduced here under fair use for the purpose of consumer education and public interest reporting.
This article is based on a review of RobotLAB’s 2023–2025 Franchise Disclosure Documents, franchise sales materials, and information provided to Franchise Reality Check™ by individuals familiar with the system. Certain sources have been anonymized to protect their identities and prevent retaliation. Allegations have not been proven in a court of law unless otherwise stated. Readers should conduct their own due diligence and consult a qualified franchise attorney before making any investment decisions.
