Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk Daily: Average Gross Sales, Selected Costs, and Operating Profits of La Madeleine Country French Cafe’s Company-Owned Restaurants

by Franchise Chatter on November 20, 2012

in Bakery Franchise, Fast Casual Restaurant Franchise, Franchise Earnings

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Highlights of La Madeleine Country French Cafe’s Item 19 Financial Performance Representations (2012 FDD)

  • La Madeleine Country French Cafe restaurants (“Bakery Cafes”) specialize in the sale of fresh bakery goods, French-themed entrees, sandwiches, soups, salads, pastries, gourmet coffees, wine, and privately-labeled retail items such as soups, salad dressings, and gourmet coffees.
  • La Madeleine Franchising Company, Inc. (the franchisor) is headquartered in Dallas, Texas, and just began franchising in late 2011. The brand has been around for nearly 30 years.
  • The total investment necessary to begin operation of a single Bakery Cafe is $1,157,000 to $1,602,000 (excluding real estate costs and landlord allowances). This includes $43,000 to $45,250  that must be paid to the franchisor and its affiliates.
  • All franchisees must first sign a Development Agreement under which the franchisee has the right and obligation to develop a specified number of Bakery Cafes. The total investment necessary for the Development Agreement, assuming that the agreement covers 1 to 5 Bakery Cafes, is $40,000 to $90,000. All of this amount is payable to the franchisor.
  • In Item 19, the franchisor provides information about the actual operating results of the Bakery Cafes operated by its affiliates. As noted in Item 1, the franchisor refers to these Bakery Cafes as “company-owned” outlets in the disclosure documents.
  • The company-owned Bakery Cafes included in Item 19 range in size from 800 square feet to 9,400 square feet, but most of them are within or close to the anticipated size range of your Bakery Cafe. The company’s new franchise prototype is 3,500 square feet. Some of the company-owned Bakery Cafes are freestanding buildings, but most are in-line or end-cap units, like those you would construct and operate. Seating capacity of the existing company-owned Bakery Cafes ranges from approximately 60 to 200 seats, but most of them are within or close to the range of 100 to 125 seats.

Average Gross Sales for the Consecutive Fifty Two Week Period Ending December 12, 2011

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