Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on Scooter’s Coffee’s Estimated Annual Revenues, Cost of Goods Sold, Labor Costs, and EBITDA

by Franchise Chatter on July 1, 2014

in Coffee Franchise, Franchise Earnings



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Scooter's Coffee 2

Highlights of Scooter’s Coffee’s Item 19 Financial Performance Representations (2014 FDD)

  • Scooter’s Coffee offers franchises for the establishment and operation of 3 different types of quick-service coffee stores, specializing in drive-through, carry-out, and in-store-seating service of espresso drinks, smoothies, baked goods, and other items. The following are the 3 types of Stores currently being offered:
  • Type 1 – Drive-Up Kiosks:  Although it has been updated and changed throughout the years, the original store design is the drive-up kiosk, which has included some changes, including size and configuration. There is no seating, and sales are primarily of drinks served through drive-up windows. They are designed to be low overhead, small footprint, and are usually located in a parking lot near other retail shopping. They provide convenience for the mobile customer. Business is stronger in the morning hours and weekdays.
  • Type 2 – Coffeehouse With Drive-Thru:  These are generally spaces located in a strip center and are known as “end cap space,” or they are free-standing buildings with inside seating. Type 2 Stores  have a drive-up window to service mobile customers, plus some inside seating to accommodate walk-in customers.
  • Type 3 – Specialty:  These stores are carts or small spaces located in specialty locations (e.g. airports and business atriums), but are also located within other businesses such as hospitals or large office buildings.
  • The following are only estimates of the annual revenue, cost of goods sold as a percentage of revenues, labor costs as a percentage of revenues, and EBITDA, respectively, that Scooter’s Coffee thinks you can obtain. There is no assurance you will achieve these results.
  • The projected levels of gross revenue, cost of goods sold as a percentage of revenues, labor costs as a percentage of revenues, and EBITDA are derived from the actual historical performance of Type 1 and Type 2 Stores owned by Scooter’s affiliate, Boundless Operations. The projections are based on the financial statements for those Stores for the period January 1, 2013 through December 31, 2013.
  • As of December 31, 2013, there were 105 outlets in the entire Scooter’s system, of which 39 were Type 1 Stores and 16 were Type 2 Stores during the entire period measured. Boundless Operations owned 10 of those Type 1 Stores and 3 of those Type 2 Stores during the entire measured period, and Scooter’s used data from all 13 of those Stores in making the projections below.
  • Scooter’s did not use data from independent franchisees because it does not have direct access to data from the outlets owned by such franchisees, and Scooter’s did not use data from Stores that Boundless Operations owned for part of the period measured but sold to independent franchisees before the end of the period measured, because it did not have access to data from those outlets for the entire period.
  • The projections below assume that the franchise owner follows the standard operating procedures and efficiency guidelines provided by Scooter’s Coffee and sells all of the products that Scooter’s Coffee has approved for sale in Type 1 Stores and Type 2 Stores.
  • 11 of the 13 outlets whose data were included in making the following projections are located in large metropolitan areas. The market where your store will be located, however, may be in a smaller urban or suburban area. Accordingly, the results achieved by these outlets may not be typical for those in your area.
  • As of December 31, 2013, the Type 1 Stores whose data were used for projections below had been in business at least 21 months. As of December 31, 2013, the Type 2 Stores whose data were used for projections below had been in business at least 81 months.
  • The data used for the projections below concerning labor costs and EBITDA include the cost of a Type 1 or Type 2 Store manager’s salary but exclude any separate salary for the franchise owner.
  • 2 of the Stores whose data were used in the projections below operate on real property that is owned by Boundless Operations, rather than on leased property.

Type 1 Store – Projections of Revenues, Cost of Goods Sold, and Labor



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