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FDD Talk: Gross Sales and Cost of Goods Sold for a Peoples Organic Coffee & Wine Cafe (2013 FDD)

by Franchise Chatter on March 21, 2014

in Coffee Franchise, Franchise Earnings



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Highlights of Peoples Organic Coffee & Wine Cafe’s Item 19 Financial Performance Representations (2013 FDD)

  • The data presented in this Item 19 is based upon historical financial performance information from the Peoples Organic Coffee & Wine Cafe (a Full Cafe) located at 3545 Galleria, Edina, Minnesota 55435 (“Galleria Cafe”) for the following periods:
  • (1) the 52-week period beginning on December 27, 2010 (the last Monday of 2010) and ending on December 25, 2011 (the last Sunday of 2011) (“2011 Period”); and (2) the 2012 fiscal year (January 1, 2012 to December 31, 2012) (“2012 Fiscal Year”).
  • Peoples Organic Coffee and Wine CafeThe Galleria Cafe is located at a traditional location within an enclosed, high-end shopping complex. The Galleria Cafe has a separate bar and seasonal patio, serves wine and beer, seats approximately 112 customers (68 inside and 44 on the patio), and occupies approximately 2,650 square feet of space.
  • The Galleria Cafe has a full kitchen and, as of the issuance date of the disclosure document, has never used a commissary.
  • The franchisor’s affiliate, Galleria, opened the Galleria Cafe on December 8, 2010, and continuously owned and operated it from that date through November 8, 2012, the date it sold the Galleria Cafe to Peoples Organic Coffee Bakery Cafes, Inc., one of the company’s franchisees (“Galleria Franchisee”). Galleria Franchisee has continuously owned and operated the Galleria Cafe since it purchased it and took over operations on November 19, 2012.
  • Accordingly, the data presented in this Item 19 for the operation of the Galleria Cafe during the entire 2011 period, and from January 1, 2012 through November 18, 2012 (the period during which it was owned and operated by Galleria), is based on information provided to the franchisor by employees of Galleria.
  • In contrast, the data presented in Item 19 for the operation of the Galleria Cafe from November 19, 2012 to December 30, 2012 (the period during which it was owned and operated by Galleria Franchisee) is based on information provided to the franchisor by Galleria Franchisee, although the franchisor has not independently audited or verified this information.
  • “Gross Sales” has the same general meaning as in the Franchise Agreement, except that it applies to the sales of products and services from the Galleria Cafe.
  • “Food Sales” means the sale of all products and services from the Galleria Cafe other than “Bar Sales.”
  • “Bar Sales” means the sale of all wine and beer from the Galleria Cafe.
  • “Cost of Goods Sold” means the cost of goods and products sold as is generally understood in the restaurant industry, and includes any applicable delivery costs.
  • “Gross Margin” was derived by subtracting the relevant Cost of Goods Sold from relevant Gross Sales.
  • “Gross Margin Percentage” was derived by dividing the relevant Gross Margin by relevant total Gross Sales.
  • The Gross Profit figure described below does not reflect any costs and expenses relating to the operation of a Cafe, including without limitation Royalty Fees and Advertising Assessments paid to the franchisor, and rent, advertising, insurance, utilities, and payroll costs, as well as the costs of complying with laws and regulations that govern the sale of alcohol, if you are authorized to offer and sell alcohol from your Cafe. These costs must be deducted to obtain your net income or profit.
  • One Peoples Organic Coffee & Wine Cafe has earned this amount. Your individual results may differ. There is no assurance you will earn as much.

Total for 2011 Period (12/27/10 to 12/25/11)



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