Highlights of Marco’s Pizza’s Item 19 Financial Performance Representations (2013 FDD) – Part 2
Explanatory Notes for Part 2 – Statement of Typical Expenses for Affiliate-Managed Stores at Average Volume Sales
- The costs presented in the chart below are the actual averages of the costs incurred by the 29 Affiliate-Managed Stores that were open during the entire 52-week period ending December 30, 2012. The operating data for these Stores were re-stated to a common format.
- Revenues and expenses were eliminated which did not directly relate to the operation of Marco’s Pizza Stores, or the determination of Store earnings before interest, taxes, depreciation, and amortization. Some cost categories were omitted in order not to mislead you as these cost categories are highly dependent upon factors beyond the company’s ability to explain.
- As a franchisee, you will be required to pay royalty fees and make local advertising expenditures, as well as to make contributions to advertising funds and marketing expenditures.
- These costs are based upon a number of well-established Stores operated by affiliates of the franchisor in primarily two cities in Ohio and Indiana.
- Among the additional categories of expenses that you may incur are:
- rent and occupancy costs;
- franchisee compensation over and above that earned from the operations of the Store business (such as the salary that you may draw);
- employee benefits, such as health, vacation, and pension plan contributions (none of which are included in the payroll numbers in the chart);
- debt service;
- Store facilities and property maintenance (and reserves for future maintenance);
- business and regulatory fees and licenses;
- ongoing and supplemental training expenses;
- recruitment expenses;
- legal and accounting fees; and
- bookkeeping and other professional services.
Part 2 – Statement of Typical Expenses for Affiliate-Managed Stores at Average Volume Sales