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FDD Talk 2013: Average Gross Sales, Payroll Expenses, and Cost of Goods Sold for Interstate All Battery Centers (2013 FDD)

by Franchise Chatter on November 18, 2013

in Battery Franchise, Franchise Earnings



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Highlights of Interstate All Battery Center’s Item 19 Financial Performance Representations (2013 FDD) – Part 1

  • This Item contains certain historical information concerning sales, payroll expenses, and cost of goods sold for the 13 company-owned and 63 franchised full-size Centers that were open for the entire 12-month period ending April 30, 2013, as well as the 53 franchised full-service Centers that were open for the entire 24-month period ending April 30, 2013.
  • Interstate All Battery Center Photo by Interstate BatteriesFull-size Centers carry the company’s full product line and offer retail, commercial, and custom assembly products.
  • The franchisor has not included results for full-size Centers that opened or closed during that period, and it has not included information for five warehouse locations that offer limited services under special arrangements with it.
  • The first table below shows the average gross sales, average payroll expenses, and average cost of goods sold as a percentage of gross sales for the 13 company-operated full-size Centers which were open 12+ months, for the 12 months ended April 30, 2013.
  • The second table below shows the average gross sales, average cost of goods sold, and average cost of goods sold as a percentage of gross sales for the 29 franchised full-size Centers which were open 36+ months, for the 12 months ended April 30, 2013.
  • The third table below shows the average gross sales, average cost of goods sold, and average cost of goods sold as a percentage of gross sales for the 37 franchised full-size Centers which were open 24+ months, for the 12 months ended April 30, 2013.
  • The fourth table below shows the average gross sales, average cost of goods sold, and average cost of goods sold as a percentage of gross sales for the 45 franchised full-size Centers which were open 12+ months, for the 12 months ended April 30, 2013.
  • The fifth table below shows the average gross sales, average cost of goods sold, and average cost of goods sold as a percentage of gross sales for the 144 franchised Centers which were open 12+ months, for the 12 months ended April 30, 2013.
  • The franchisor prepared the tables based on information reported to it by franchisees. The franchisor has not audited the information and cannot vouch for its accuracy.
  • Payroll includes the actual salaries, wages, bonus, overtime, and payroll taxes of franchisor-owned Centers. This includes the cost of the Manager, B2B Salesperson, Assistant Manager, Sales Associates, and delivery drivers. Excluded expenses are employee insurance, contract labor, benefits, training and education, uniforms, etc.
  • Cost of Goods Sold includes costs of starting/lighting/ignition products (a.k.a.”SLI” products), specialty products, and accessories. The Cost of Goods Sold figure includes the cost of obtaining the inventory sold, including shipping and handling costs, and also includes the cost of recycling used battery products returned to the stores by customers.
  • Furthermore, the Cost of Goods Sold figure does not reflect operating expenses of the Center, which are significant and variable. Operating expenses include, for example, supplies, bank and credit card fees, travel, salaries and employee benefits, real estate costs, depreciation and amortization, selling expense and general and administrative expenses such as utilities and telephone service, legal and accounting fees, insurance, and repairs and maintenance.
  • In addition to operating expenses, you must pay 5% of gross sales for royalties and contribute 1.5% of gross sales to the National Marketing Fund and spend a minimum annual amount for Local Store Marketing and/or marketing cooperatives.
  • In addition to operating expenses, you will also incur the full cost of constructing, remodeling, and/or equipping your Center, including the cost of obtaining and maintaining the required computer system, a site license, and maintenance and support contract for the software.

Table 1 – Operating Results for Company-Operated Full Centers Open 12+ Months (13 Centers)



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