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FDD Talk 2013: Average Net Sales and Operating Margin Before Occupancy Costs for Checkers Drive-In Restaurants (2013 FDD)

by Franchise Chatter on November 15, 2013

in Franchise Earnings, Hamburger Franchise



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

Explanatory Notes for Statement of Average Net Sales of Checkers Restaurants for the 52-Week Period Ending December 31, 2012

  • The Average Net Sales statement consists of the averages of the reported annual Net Sales of the 168 company-owned Restaurants and the 289 franchised Restaurants that were open during the entire 52-week reporting period ending December 31, 2012.
  • The Average Net Sales statement excludes the results of 2 Checkers company-owned Restaurants that were not open during the entire 52-week reporting period ending December 31, 2012.
  • Of the 457 Checkers Restaurants used for calculating the Average Net Sales for the 52-week reporting period ending December 31, 2012, the 289 franchisee-owned Restaurants had Net Sales ranging between $399,671 and $3,865,518, of which 131 Restaurants, or 43.3%, attained or surpassed the Average Net Sales of franchisee-owned Restaurants.
  • The Net Sales of franchisee-owned Restaurants were derived from unaudited financial reports submitted by franchisees for the purpose of computing royalties. The franchisor compiled the Net Sales of company-owned Restaurants on the basis of generally accepted accounting principles, consistently applied.
  • Some Checkers Restaurants have sold this amount. Your individual results may differ. There is no assurance that you’ll do as well. A new franchisee’s financial results are likely to differ from the results stated in the financial performance representation.

Explanatory Notes for Statement of Operating Margin Before Occupancy Costs

  • The Statement of Operating Margin Before Occupancy Costs for the average Checkers Restaurant consists of the mean averages of the Net Sales and various categories of costs of the 168 company-owned Checkers Restaurants that were open during the entire 52-week reporting period ending December 31, 2012. It excludes the results of 2 company-owned Restaurants that were not open during the entire period.
  • Of the 168 company-owned Checkers Restaurants used for calculating the Operating Margin Before Occupancy and Royalty Costs, 72 or 42.9% attained or surpassed the stated average.
  • The Statement of Operating Margin Before Occupancy Costs for the Top 25% Checkers Restaurants consists of the mean averages of the Net Sales and various categories of costs of the 42 company-owned Checkers Restaurants comprising the Top 25% of the 168 company-owned Restaurants that were open during the entire 52-week reporting period ending December 31, 2012. It excludes the results of 2 company-owned Restaurants that were not open during the entire period.
  • Of the 42 company-owned Checkers Restaurants used for calculating the Operating Margin Before Occupancy and Royalty Costs for the Top 25%, 16 or 38.1% attained or surpassed the stated average.
  • Cost of Sales. Food, paper, and packaging costs, less beverage allowances.
  • Labor and Benefit Costs. Wages, bonuses, payroll taxes, workers’ compensation, medical insurance, and other benefits.
  • Advertising. Marketing fees to the NPF and regional co-ops and restaurant-specific promotional programs. Some marketing expenses are included in the cost of sales.
  • Utilities. Electricity, gas, water, and sewer.
  • Other. Maintenance and repairs, supplies, bank charges, uniforms, and other services.
  • Operating Margin Before Occupancy and Royalty Costs. Operating margin excludes multi-unit supervision costs typically charged against restaurant costs for company-owned Restaurants.
  • Royalty Costs. Royalty costs are not incurred by company-owned Restaurants, but are included to present theoretical franchise costs.
  • Operating Margin Before Occupancy Costs. Occupancy costs are excluded because of significant variations due to local market factors.
  • The Average Checkers Restaurant table represents company-owned Restaurants that were open and operated for the full fiscal 2012 year. This includes the operations of 168 Restaurants.
  • The Checkers Top 25% table represents the mean averages of the top 42 company-owned Restaurants based on Net Sales in fiscal 2012.

Statement of Average Net Sales of Checkers Restaurants for the 52-Week Period Ending December 31, 2012

  • Company-owned Restaurants:  $973,629
  • Franchisee-owned Restaurants:  $922,412
  • Company and Franchisee-owned Restaurants:  $941,240

Statement of Operating Margin Before Occupancy Costs

Average Checkers Restaurants



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