This special FDD Talk series will highlight the financial performance representations of over 20 Children’s franchises, with a cross-analysis of the featured franchises to be published at the end of the series.

Highlights of Young Rembrandts’ Item 19 Financial Performance Representations (2012 FDD) – Part 2

Statement of Average Annual Gross Revenues and Expenses of 12 Franchisees for Calendar Year 2011

The following chart is a statement of average annual gross revenues and certain expenses for the calendar year 2011 for a group of 12 Young Rembrandts franchisees having annual gross revenues for the calendar year 2011 of between $123,841 and $179,674 for operation of a single franchise territory and who had been in operation at least 2 years as of December 31, 2011.

There were 20 Young Rembrandts franchisees that fell within the range of annual gross revenues of between $123,841 and $179,674 per franchise territory; however, 8 of the 20 were not included in the chart for the following reasons:

5 franchisees operated multiple territories under one profit and loss statement, 1 was not operating for the full 12 months, and 2 did not follow the company’s chart of accounts in preparing financial statements.

The revenue information was compiled from monthly gross revenues reported and year-end profit and loss statements submitted to the company by the franchisees. The expense information was compiled from the year-end profit and loss statements submitted to the company by the franchisees. The profit and loss statements submitted by franchisees were not independently audited.

The time period the franchisees included in this chart have been in business ranged from 24 months to 108 months.

No amount is included in the Total Operating Expenses for rent or other office expenses since the company recommends that Young Rembrandts franchisees operate the franchise business from their homes (unless local ordinances prohibit doing so).

No amount is included in the Total Operating Expenses for loan payments. If you secure a business loan for the establishment or operation of the franchise business, payments on the loan will be an additional expense.

The entry for Wages and Taxes below does not include any compensation to owner(s) of the business. The entry is limited to compensation paid to teachers and any administrative staff. Any owner’s draw would be taken from the amount Available to Owner.

Total Operating Expenses does not include any amount for income or other taxes, except for employment taxes included in Wages and Taxes.

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