Highlights of Great Play’s Item 19 Financial Performance Representations (2013 FDD) – Part 1

• Great Play franchisees operate gyms for kids, currently from age 6 months to 5th grade, which will offer and provide various motor skill, sport skill, and physical education classes, birthday parties, and other programs that may be developed in the future.

• Table 1 summarizes revenue and expense information for Great Play units that had been open for at least one year as of the start of 2012. The financial information is taken from the unaudited financial records submitted to the company by these units. It has not been verified by the company or by an independent certified public accountant.

• 
  
  
  
  The table summarizes the financial performance of Great Play units, both affiliate owned and franchised, that had been open for at least one year as of the beginning of 2012. Three of four such units are included. The excluded unit had a change of ownership during 2012 and did not report full year financial figures.

• The term EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA is a rough approximation of a company’s operating cash flow.

• EBITDAR is EBITDA before rent and royalty expense. This metric is presented because rent can vary widely among Units, and in some cases, sites holding Units could potentially be owned instead of rented as well. Also, the royalty expense basis varied among these units.

• Rent and royalty expenses may constitute a significant portion of a franchisee’s expenses and are not considered in the financial performance disclosures. EBITDAR does not provide a complete picture of cash flow and is not to be confused with net income.

• Adjusted EBITDAR excludes the cost (payroll and benefits) of a second manager, if present. This metric is presented to normalize financial reporting among sites in which an owner plays an active role as one of the Unit’s managers and those in which the owner does not, thereby needing a second manager for the location.

• Payroll and benefits include staff pay, payroll taxes, workers compensation insurance, health insurance for full time employees, and payroll processing costs, adjusted as described above.

• Marketing includes direct mail, online advertising, print advertising, print collateral materials, and this Unit’s contribution to the Marketing Fund.

• Insurance includes liability insurance, property, and student accident insurance.

• Utilities include gas, electric, internet, phone, and water.

• General and administrative expenses include various supplies (cleaning, birthday favors, balloons, cleaning supplies, office supplies, etc.), annual music licenses, gym and tech equipment replacement, cleaning, hiring, repairs and maintenance, accounting, and other miscellaneous expenses.

• The financial information does not include rent expenses, which can vary substantially among Units; debt service; state or local sales taxes; federal, state, or local income taxes; depreciation or amortization; or any payments to the Units’ owners, other than the net profits of the Unit.

• The financial information is based on Unit’s operating experience in the suburban New York and Phoenix areas.

High

🎯Find GOOD Franchises That Are Still Available in Your Target Area (Free Tool)

💰How Much Franchise Can You Afford? Use Our Free Financial Calculator

❤️Looking for a Franchise You’ll Love? Watch Our Free Webinar Live or the Recording Later