Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2013: Average Operating Results for Company-Owned Traditional McAlister’s Deli Restaurants (2013 FDD)

by Franchise Chatter on September 20, 2013

in Franchise Earnings, Sandwich Franchise



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Highlights of McAlister’s Deli’s Item 19 Financial Performance Representations (2013 FDD) – Part 2

Trailing 12-Month Financial Performance Average Operating Results for Company-Owned Traditional Restaurants

  • The following table represents average financial performance in 3 groupings for the 32 company-owned Traditional Restaurants that operated for the trailing 12 months ending December 30, 2012.
  • While there were 34 company-owned Traditional Restaurants in operation as of December 30, 2012, none were excluded because they did not operate for the entire 12 months, and 2 company-owned Express Restaurants were excluded.
  • McAlister's Deli Photo by 10outofsomethingThe average Occupancy expenses have been adjusted by the franchisor to reflect an average for only company-owned Traditional Restaurants with traditional market rate leases for their local area. Therefore, in calculating such average, the franchisor has excluded Occupancy expenses for company-owned Traditional Restaurants that are owned properties or sales leased back locations (the “Excluded Occupancy Expenses”).
  • The Excluded Occupancy Expenses reflect the Occupancy expenses for 12 company-owned Traditional Restaurants (4 in the $1 million range, 1 in the $1 million to $1.3 million range, and 7 in the above $1.3 million range). The unadjusted averages for the Occupancy expenses (i.e. including the Excluded Occupancy Expenses) are $119,619 for the less than $1 million range, $92,898 for the $1 million to $1.3 million range, and $80,994 for the above $1.3 million range.
  • Total Revenue is the aggregate amount of revenue derived from food and beverage, catering, and merchandising sales by a Traditional Restaurant during the entire 12-month reporting period ended December 30, 2012, whether for cash or credit.
  • Cost of Sales includes the cost of food, beverages, merchandise, packaging, and other products included in the preparation and sale of food, beverages, and other products to customers. The cost of sales may vary considerably based on where a restaurant is located within the geographical area serviced by the franchisor’s approved suppliers and distributors.
  • Labor includes wages paid to management and employees of the Traditional Restaurant, including restaurant managers and shift supervisors, management bonuses, payroll taxes, health insurance, workers’ compensation, vacation and other employee benefits. This amount does not include any wages or overhead from the central office.
  • Occupancy expenses include base rent, percentage rent, common area maintenance, real estate taxes, and other miscellaneous lease expenses.
  • EBITDA from operations means restaurant level earnings before interest, taxes, depreciation, and amortization. In addition to those items, this category does not include the following expenses associated with operating a franchised Traditional Restaurant:  general liability insurance, pre-opening expenses, royalty fees, and other miscellaneous expenses a franchisee may incur.

Less Than $1 Million in Revenues (9 Restaurants)



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