Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on sweetFrog’s Profit and Loss Information for an Affiliate-Owned Shop

by Franchise Chatter on June 11, 2014

in Franchise Earnings, Frozen Yogurt Franchises

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sweetFrog Frozen Yogurt Interior Photo by woofwoofwoof

Highlights of sweetFrog’s Item 19 Financial Performance Representations (2014 FDD) – Part II

Explanatory Notes for Table 3 – Profit and Loss Information for One Affiliate-Owned Shop

  • The table below reflects the actual profit and loss information for one of the Affiliate-Owned Shops presented under Table No. 1 in Part I.
  • This Affiliate-Owned Shop was selected because it was open for the entire year and its Net Sales for Period 6 were the closest to the Period 6 Affiliate-Owned and Franchised Average of $46,315 presented in Table No. 1 in Part I. This Shop’s Net Sales for Period 6, which includes the date range from May 20, 2013 to June 16, 2013 were $46,146.
  • SweetFrog is presenting cost and expense information for the Shop for only Period 6, which was in the middle of the year, reflected in Table 1 in order to present costs and expense information that will be experienced on a periodic rather than an annual basis.
  • This Shop has been in operation for 18 months and is located in Richmond, Virginia.
  • The information in Table 3 below represents actual results for this Affiliate-Owned Shop, as reported to sweetFrog by the Affiliate using generally accepted accounting principles. SweetFrog has not audited, confirmed, or verified this information.
  • SweetFrog has not included any cost and expense data related to any Franchised Shops since it does not have the ability to poll such data through its point-of-sale system and its franchisee reports are not handled in a consistent manner.
  • Gross Sales is the total of all income and revenue from the sale of all sweetFrog food products and merchandise to customers.
  • Net Sales is Gross Sales less customer returns and discounts (coupons, etc.).
  • Cost of Goods Sold includes the total costs of frozen yogurt and merchandise sold at the Shop. It includes, but is not limited to, yogurt mixes, topping supplies, and serving and packaging supplies. These costs may vary from year to year, or within a year, and among different locations due to price fluctuations of supplies.
  • Labor includes hourly employee wages in addition to any store level salaried employees (store manager).
  • Rent and Utilities includes rent and property taxes and costs for gas, electricity, water and sewage, trash, telephone, and Internet.
  • Marketing includes the amounts that this Shop contributed for the Systemwide Marketing Fund (SMF) contribution and spent on local marketing. This also includes payments to charities and school groups for spirit nights.
  • Royalty is the 5% royalty fee paid to sweetFrog.
  • Miscellaneous includes commercial insurance for workers comp and general liability, software fees, and other professional service fees (accounting, legal, etc.).
  • Net Operating Income represents the Net Sales minus the selected expenses reported above.

Table 3 – Profit and Loss Information for One Affiliate-Owned Shop

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