(Ambrosio’s note:  Over the next few days, I will be discussing the Item 19 financial performance representations of 10 up-and-coming pizza franchises that you’ve probably never heard of. 

Unlike Papa John’s, Papa Murphy’s, Marco’s Pizza, and Hungry Howie’s (all of which I’ve featured previously on FDD Talk), these franchises are not yet household names. But I do think they are worth examining because they can provide us with helpful clues on the profit potential of pizza franchises in general.

Please stay tuned for my industry-level bottom line analysis to be published at the end of this series.)

Highlights of Pizza Patron’s 2011 Franchise Disclosure Document

• The following is information on the eight stores owned and operated by Antonio Swad. Mr. Swad provided this information and it is not audited. Neither Mr. Swad nor the franchisor operates any other stores.

• All the stores are located in Dallas, Texas, a market population of several million people, including a sizeable Hispanic community. All the stores are located in Hispanic-majority communities, which the franchisor assumes is a significant factor in their success.

Annual Sales by Store Location (and Store Number)

Pleasant Grove – #01

• 2006:  $1,060,489
• 2007:  $1,239,569
• 2008:  $1,015,744
• 2009:  $986,020
• 2010:  $825,384

Oak Cliff – #02

• 2006:  $1,057,853
• 2007:  $1,052,727
• 2008:  $917,579
• 2009:  $764,975
• 2010:  $595,647

Buckner – #05

This store opened on August 26, 2003.

• 2006:  $660,741
• 2007:  $865,588
• 2008:  $823,444
• 2009:  $778,590
• 2010:  $594,994

East Jefferson – #27

This store opened on October 5, 2004.

• 2006:  $586,164
• 2007:  $695,431
• 2008:  $600,064
• 2009:  $647,790
• 2010:  $534,649

Hampton & Illinois – #50

This store opened on September 14, 2005.

• 2006:  $728,728
• 2007:  $820,102
• 2008:  $724,700
• 2009:  $674,873
• 2010:  $556,961

Lake June – #77

This store opened on November 28, 2007.

• 2006:  0
• 2007:  $70,322
• 2008:  $880,071
• 2009:  $923,376
• 2010:  $780,846

St. Francis – #103

This store opened on July 29, 2009.

• 2006:  0
• 2007:  0
• 2008:  0
• 2009:  $162,480
• 2010:  $372,520

DeOro – #108

This store opened on November 2, 2009.

• 2006:  0
• 2007:  0
• 2008:  0
• 2009:  $68,360
• 2010:  $475,867

Profit and Loss Statements by Store Location (and Store Number)

• For many reasons, the results of operations you experience in your store may differ significantly from Mr. Swad’s experience. Among other factors, he has operated stores since 1986 and has vast experience in store management. The stores are located in well-established shopping centers that cater to Hispanic customers. The stores also benefit from the relatively mild winters that Dallas, Texas experiences.

• The statements include the salary and benefits of a store manager and assistant managers, but the compensation scale in Dallas, Texas may not reflect market rates in your area.

• Mr. Swad’s expenses do not include a royalty of 5% of gross sales that you must pay.

Pleasant Grove Store – #01

• Food cost as a percentage of sales was 32.9% in 2010. Pizza Patron’s target food cost is 32% of sales.
• Store labor expense as a percentage of sales was 22.7% in 2010. Pizza Patron’s target labor expense is 23% of sales.

Sales:  $825,384

Cost of Sales:  $271,920

General and Administrative Expenses