Highlights of Yogurtland’s Item 19 Financial Performance Representations (2013 FDD)
Number of Yogurtland Stores Included in These Financial Performance Representations (Average Unit Sales Volume and EBITDA Statement)
1. The following information reflects the past financial performance of the combined system, i.e. that of
- Yogurtland affiliates, Withim Corporation, which operated one (1) retail store (in Fullerton, CA) for the full calendar year 2012;
- Higher Ground Corporation, which operated two (2) retail stores (in Irvine and Los Angeles, CA) for the full calendar year 2012;
- First Vine Partners, LLC, which operated one (1) retail store (in Alhambra, CA) for the full calendar year 2012;
- PMC Enterprise, Inc., which operated two (2) retail stores (in Los Angeles and Lakewood, CA) for the full calendar year 2012;
- MCP Enterprise, Inc., which operated one (1) retail store (in Los Alamitos, CA) for the full calendar year 2012;
- and franchisee operated retail stores for the full calendar year 2012 (“Franchisee Stores”).
2. The information consists of:
- Average Gross Sales for Withim, Higher Ground, First Vine, PMC, MCP, and Franchisee Stores that were open for the full calendar year 2012; and
- Certain Fixed and Controllable Costs achieved by Withim, Higher Ground, First Vine, PMC, and MCP Stores that were open for the full calendar year 2012.
3. For the full calendar year 2012, Yogurtland’s affiliates Withim, Higher Ground, First Vine, PMC, and MCP operated seven (7) retail stores in aggregate for the entire year (which serves as the basis for the analysis below).
4. In addition, there were one hundred thirty-four (134) franchised stores open for the full calendar year 2012.
5. Stores open less than one full year have been omitted, of which there were forty (40) franchised and one (1) operated by Yogurtland’s affiliate YL Park Slope Brooklyn Inc.
6. The average net sales (less sales tax) of the seven (7) affiliate stores and the one hundred thirty-four (134) franchised stores and open for the full year 2012 are shown in Table 1 (Average Unit Sales Volume) below.
Notes and Assumptions for Table 1 (Yogurtland’s Average Unit Sales Volume)
- Yogurtland compiled the figures provided in Table 1 from its affiliates’ unaudited financial statements and from sales reports submitted to it by its franchisees on a calendar year basis.
- The sales information provided by its franchisees and used by Yogurtland in determining the numerical values provided has not been audited and has not necessarily been prepared on a basis consistent with generally accepted accounting principles.
Notes and Assumptions for Table 2 (Yogurtland’s EBITDA Statement)
- The information contained in the average EBITDA statement below is for Yogurtland’s affiliate stores (Withim, Higher Ground, First Vine, PMC, and MCP) only.
- Franchisee Profit and Loss and EBITDA information varies by franchisee and is unavailable to Yogurtland.
- The average EBITDA statement does not include franchise royalty fees, cost of financing, and other franchise expenses.
- The average EBITDA statement below is not a statement of profits and losses; it represents earnings before interest, taxes, depreciation, and amortization, and indicates the cash flow from the stores’ operation.
- Sales shown below are net sales (derived from Withim, Higher Ground, First Vine, PMC, and MCP stores) and includes all food, beverage, and promotional items, net of sales taxes, discounts, and coupons.
- Food and Paper includes food, paper, and other items for resale to the customer.
- Labor includes wages paid to all hourly and management employees working in the store, as well as all management bonuses. Your costs could vary depending on the prevailing wage rates of the area of the country in which your store is located and the specific labor laws.
- Benefits include all employer and payroll taxes, workers’ compensation costs, and amounts for vacation and health insurance. Other factors that could make your costs differ from Yogurtland’s affiliates’ costs are the amount of vacation time granted and the amount and type of insurance coverage provided to employees.
- Utilities and Repair and Maintenance costs vary somewhat with the sales volume and are generally seen as controllable by store management. Variables that could impact your total utilities and maintenance include the region of the country in which your store is located.
- Supplies include janitorial, cleaning, operating, and office supplies, and vary based on the size and volume of the store.
- Rent and real estate taxes include both base and percentage rent, if any, as well as real and personal property taxes. In addition, there are other occupancy costs such as common area maintenance, equipment leases, insurance, and various taxes and licenses.
- Other Controllable Expenses include services for security, armored pick-up, in-store music, local advertising, and daily cash over or short charges. Insurance costs for comprehensive general liability, property, and casualty insurance are also reflected in Other Controllable Expenses. You could have additional expenses in this category such as legal and other professional fees, etc.
- Controllable Profit represents the store profit after deducting those variable costs, which are within the control of store management. The estimated profits shown are pre-tax numbers. The analysis does not include any estimates of federal, state, or local taxes that you may be required to pay.
- Licenses and Fees include costs for business licenses and permits, bank and credit card service charges, and new store pre-opening expenses.
- Advertising costs include the cost of developing and executing various marketing programs for the stores. This includes the development and placement of electronic media and print advertising, as well as costs of in-store advertising materials.
- These costs do not include the Royalty or Marketing Fees that you must pay under the Franchise Agreement.