This special FDD Talk series will highlight the financial performance representations of over 20 Children’s franchises, with a cross-analysis of the featured franchises to be published at the end of the series.
Highlights of Computer Explorers’ Item 19 Financial Performance Representations (2012 FDD)
- The franchise offered is for a business that provides computer education programs and related services under the name Computer Explorers.
- The total investment necessary to begin operation of a Computer Explorers franchise is estimated between $62,925 and $73,250 over the term of the Franchise Agreement.
- Of this amount, $23,425 to $33,750 is invested for the first 18 months of the franchise relationship. The balance of the investment begins with the 19th month of the franchise relationship.
- This includes $49,500 that is to be paid to the franchisor over the term of the Franchise Agreement.
Average Annual Gross Sales of Franchise Territories (Territories Reporting for the Full 12 Months in 2009, 2010, and 2011)
- The results achieved by franchise territories that did not report gross sales for the full 12 months in any year (such as franchise territories that started operations mid-year), and franchise territories that were transferred and assigned new franchise numbers, are not included in this Item 19.
- Gross sales represent the actual revenues collected by franchise territories and are stated before business expenses are paid. While franchise territories carry varying amounts of receivables, receivables are not included in gross sales.
- Business expenses such as the following must be paid out of gross sales: salaries and benefits; commercial office rent (not required); continuing franchise fees (6% or 8%, subject to monthly minimums); advertising and promotional contributions; equipment; office supplies and expenses; travel expenses; amortization; depreciation; and taxes.
- The gross sales figures stated here are substantiated by unaudited reports submitted to the franchisor by its franchisees.