Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2013: Average Gross Sales, Certain Expenses, and Cash Flow of Einstein Bros. Bagels Restaurants (2013 FDD)

by Franchise Chatter on June 18, 2013

in Bagel Franchise, Franchise Earnings



Franchise Chatter Membership Information

Highlights of Einstein Bros. Bagels’ Item 19 Financial Performance Representations (2013 FDD)

  • The sales and expense information that follows has been compiled using unaudited financial data from franchised and company-owned Einstein Bros. Bagels Restaurants that were open for the entire year during the company’s last fiscal year, which started on January 4, 2012 and ended on January 1, 2013.
  • Einstein Bros. Bagels open for less than the full year were not included. There were 39 company-owned Einstein Bros. Bagels Restaurants that were not included because they were not open the entire fiscal year.

Explanatory Notes for Table 1 – Sales Distribution

  • Einstein Bros. Bagels Photo by Earl - What I Saw 2.0Table 1 below organizes the information based on the sales volume of the 21 franchised and 395 company-owned Einstein Bros. Bagels Restaurants for the period that started on January 4, 2012 and ended on January 1, 2013.
  • The number of company-owned Restaurants that achieved or surpassed the Average Gross Sales figure in Table 1 was 164 out of 395 (42%).
  • The number of franchised Restaurants that achieved or surpassed the Average Gross Sales figure in Table 1 was 12 out of 21 (57%).
  • Einstein Bros. Bagels has further broken down the gross sales volumes for company-owned and franchised Restaurants – both with and without a drive-thru.

Explanatory Notes for Table 2 – Cost Factors

  • Table 2 below organizes the information based on the cost factors incurred at the 356 company-owned Einstein Bros. Bagels Restaurants for the 52-week period from January 4, 2012 to January 1, 2013 (which represents 100% of those restaurants that were open for all 52 weeks of the company’s last fiscal year). (Ambrosio’s note: No explanation was given for the difference between the number of company-owned Restaurants included in Table 1 and Table 2.)
  • These cost factors are based on the company’s experience operating company-owned restaurants and should not be considered as the actual or potential costs that you will incur.
  • Because these are the results of company-owned restaurants, these figures do not include costs that a franchisee will incur, such as royalties and the amortized portion of the initial franchise fee (if it was financed).
  • Gross revenue includes all sales of food, beverages, and promotional items, and the dollar amount of coupons, employee discounts, and other promotional discounts, but excludes all sales and service taxes.
  • Discounts consist of the dollar amount of coupons, employee discounts, and other promotional discounts.
  • Gross sales includes all sales of food, beverages, and promotional items, but excludes all sales and service taxes, and the dollar amount of coupons, employee discounts, and other promotional discounts.
  • Total cost of products sold includes the cost of food, paper, and other products.
  • Labor includes hourly and salaried employee compensation, bonuses, taxes, and benefits.
  • Other operating expenses include utilities, ordinary operating maintenance and repairs, unplanned maintenance and repairs, supplies, and other miscellaneous operating expenses.
  • Non-operating expenses include rent and other occupancy expenses, insurance, and other miscellaneous expenses, but exclude depreciation and marketing.
  • Store Cash Flow = Profit After Operating Expenses less Non-Operating Expenses (which excludes depreciation), which is not a measure in accordance with generally accepted accounting principles.
  • You will incur other substantial costs in the operation of your Restaurant that are not included in this discussion, including, among others, local marketing expenses, mortgage or other debt/financing costs, computer upgrades, renovations, improvements, and major repair/maintenance expenses, legal and professional fees, income and other non-real estate taxes, and various other expenses.

Table 1 – Sales Distribution

Annual Gross Sales Levels During the 52-Week Period from January 4, 2012 to January 1, 2013



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