FDD Talk Daily: Average Revenues of Franchisee-Owned Famous Dave’s Restaurants

Highlights of Famous Dave’s Item 19 Financial Performance Representations (2012 FDD) – Part 1

• Famous Dave’s of America, Inc. franchises authentic, down-home barbecue restaurants featuring genuine smoked barbecue. Famous Dave’s Restaurants operate under the name Famous Dave’s.

• Famous Dave’s Restaurants serve combinations of hickory smoked spareribs, baby back ribs, beef brisket, herb-roasted chicken, barbecue sandwiches, char-grilled burgers, cornbread, potato salad, coleslaw, Wilbur beans, desserts, and other food and beverage items.

• The total investment necessary to open a Famous Dave’s Restaurant ranges from $636,750 to $3,216,250, if you lease the premises for a Famous Dave’s Restaurant, and ranges from $836,750 to $4,239,750, if you purchase the land and building for a Famous Dave’s Restaurant.  This includes $100,750 to $165,750 that must be paid to the franchisor.

• If you sign an Area Development Agreement, the Development Fee is $10,000 multiplied by the number of Famous Dave’s Restaurants you agree to develop.

Analysis of Average Revenues of Famous Dave’s Restaurants

• The information in Item 19 was compiled from 52 company-owned Famous Dave’s Restaurants and 125 franchisee-operated Restaurants open for the entire fiscal year ended January 1, 2012, and 8 franchisee-operated and 2 company-owned Famous Dave’s Restaurants open for a portion of fiscal year ended January 1, 2012. This information includes company-owned and franchisee-operated Famous Dave’s Restaurants located in 37 states.

• Famous Dave’s auditors have not performed any procedures on the financial information in this Item 19, and assume no responsibility for this information.

• The company-owned Famous Dave’s Restaurants included in Item 19 are substantially similar to franchised Famous Dave’s Restaurants. However, the amount of revenues and expenses incurred will vary from restaurant to restaurant.

• In particular, the revenues, expenses, and profitability of your Restaurant will be directly affected by factors which include:

• the Restaurant’s geographic location;
• competition in the market;
• presence of other restaurants;
• the quality of both management and service at the Restaurant;
• contractual relationships with lessors and vendors;
• the extent to which you finance the operation of your Restaurant;
• your legal, accounting, and other professional fees;
• federal, state, and local income taxes, gross profits taxes, or other taxes;
• discretionary expenditures;
• accounting methods used;
• certain benefits and economies of scale which Famous Dave’s may derive as a result of operating Restaurants on a consolidated basis;
• and the fees payable to Famous Dave’s by franchised Famous Dave’s Restaurants.

• The following sections describe the average annual sales of franchisee-operated and company-owned Famous Dave’s Restaurants open and operating during the entire year included in this Item.

• The reader should note that franchisee-operated and company-owned restaurants that were opened during the 2011 fiscal year (and therefore were not open for the entire year) are included for illustrative purposes only; however, annual sales information is not available for such restaurants.

Statement of Average Revenues for Franchisee-Owned Famous Dave’s Restaurants for the Fiscal Year Ended January 1, 2012