FDD Talk 2013: Average, High, and Low Gross Sales of Dogtopia Franchised Locations (2013 FDD)

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

• This Item contains the following historical sales and cost information:  the average Gross Sales of 19 Dogtopia franchised locations in operation for more than 18 months as of December 31, 2012. The locations are grouped by the length of time in operation:  18 months to 36 months, and 37 months or longer.

• 4 franchised locations are not included in this data, as they had been in operation for less than 18 months as of December 31, 2012. In addition, 3 non-franchise locations owned by the franchisor’s affiliates, Happy Tails Dog Spa LLC, DT of Herndon LLC, and DT of Tysons Corner LLC, are also not included in this data.

• The data used in preparing this financial performance representation was compiled from information submitted by the franchised locations in their unaudited sales reports and profit and loss statements. While the franchisor believes that these sales reports and profit and loss statements contain accurate information, it has not independently verified this information.

Average Gross Sales of 19 Dogtopia Franchised Locations in 2012

• Franchisees operated 23 Dogtopia locations during the entire 2012 calendar year. Of those locations, 16 had been in operation for 37 months or longer as of the end of 2012, 3 had been in operation from 18 to 36 months as of the end of 2012, and 4 had been in operation for less than 18 months as of the end of 2012.

• The following table shows, for the period from January 1, 2012 through December 31, 2012, the average Gross Sales, and the high and low Gross Sales, of:  (i) the 16 locations in operation for 37+ months; (ii) the 3 locations in operation for 18 to 36 months; and (iii) all 19 locations in operation for 18+ months.

• “Gross Sales” includes all revenues generated from all business conducted at or from a location, including amounts received from the sale and delivery of services, products, and merchandise of any nature whatsoever, whether in cash or for credit.

• “Gross Sales” does not include any sales or other taxes required to be collected by franchisees and paid to applicable governmental authorities.

• Of the 16 locations operating 37 months or longer, 5 exceeded the Average Gross Sales.

• Of the 3 locations operating from 18 to 36 months, 1 exceeded the Average Gross Sales.

• Of all 19 locations, 8 exceeded the Average Gross Sales.

• The franchisor has unaudited sales reports from all franchisees for 2012, and it believes that those reports are reasonably reliable. The numbers in the table below are based on those reports.

16 Locations Operating 37+ Months