FDD Talk Daily: Average Sales, Cost of Sales, and Gross Profit of T.G.I. Friday’s Restaurants

Highlights of T.G.I. Friday’s Item 19 Financial Performance Representations (2012 FDD) – Part 1

• The franchise is for full service casual theme restaurants featuring a specialized menu and full bar service, operating as “T.G.I. Friday’s”. Friday’s offers prospective franchisees the opportunity to sign a Development Agreement for the right to develop one or more T.G.I. Friday’s Restaurants in a defined territory and a Franchise Agreement for the right to operate one T.G.I. Friday’s Restaurant.

• The total investment necessary to begin operation of a franchised T.G.I. Friday’s Restaurant ranges from $2,071,500 to $4,855,000. This is inclusive of the fees that must be paid to the franchisor or its affiliates, which include:  (1) an earnest money deposit under a Letter of Understanding; (2) a Development Fee that ranges from $2,000 to $20,000 for each T.G.I. Friday’s Restaurant that you agree to develop; (3) an Initial Franchise Fee of $50,000; and (4) kitchen equipment, computer systems, furniture, and memorabilia fees of $368,696.

Statement of Historic Average Sales, Cost of Sales, and Gross Profit for Company-Operated T.G.I. Friday’s Restaurants – Average for 52 Weeks Ended December 26, 2011

• This statement excludes units located in airports, units not open for the full year, and company restaurants smaller than 5,700 square feet. Different assumptions and results may apply to airports and smaller sized restaurants.

• This statement does not include information for franchised Friday’s Restaurants.

• As of December 26, 2011, the average length of time that the company-operated Restaurants included in the statement have been open is 14.51 years.

• Typically, company-operated Friday’s Restaurants are located in areas with population densities in excess of 250,000 and in close proximity to regional shopping centers.

• The location of a Restaurant (whether company-operated or franchisee-operated) and the demographics of the geographic area can have a material impact on sales and expenses. Franchised Friday’s Restaurants operated in areas with population densities less than 250,000 and/or with less favorable demographic profiles are likely to experience lower sales than the average company-operated Friday’s Restaurant.

• All figures are rounded off to the nearest thousand dollars.

Tagged as: TGI Fridays