FDD Talk 2.0: Average Sales and Certain Expenses for Freddy’s Frozen Custard and Steakburgers Restaurants (2012 FDD)

(Ambrosio’s note:  Welcome to FDD Talk 2.0, a more comprehensive version of our flagship content, featuring not only the Item 19 financial performance representations of select franchises, but their estimated initial investment, unit growth, and other key items of their 2012 FDD as well.)

Highlights of Freddy’s Frozen Custard and Steakburgers’ 2012 Franchise Disclosure Document – Part 2

Other Fees Under the Franchise Agreement

• Royalty: 4.5% of all Gross Receipts

• Marketing and Advertising Fund:  Minimum – 0%, Maximum – 0.5% of Gross Receipts. Currently, the Marketing and Advertising Fund contribution is 0.25%.

• Cooperative Advertising:  Minimum – 0%, Maximum – 2% of Gross Receipts per 28-day operating period.

Sales for Affiliate-Owned and Franchise-Owned Restaurants

• As of December 28, 2011, there were nine restaurants which are operated by the company’s affiliate, FFC, under the name “Freddy’s Frozen Custard and Steakburgers.”

• The FFC operating restaurants and the franchisee restaurants are a mix of stand-alone units located in former restaurant or other retail buildings, stand-alone and in-line new construction, and in-line in former restaurant or other retail sites.

• This financial performance representation is based on the actual operating results of the 8 FFC stores and the franchisee-reported sales of the 37 franchised stores that were open prior to the beginning of the fiscal year ended December 28, 2011, although no accountant independently audited the specific data from which the following information was derived.

• The section below shows figures from the fiscal year ended December 28, 2011. It shows the average weekly gross receipts for stores open prior to the beginning of the fiscal year then ended.

• Based on the company’s experience, the restaurants experience seasonal fluctuations, with greater sales occurring during the months of March through August and lesser sales occurring during the months of September through February.