Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on East Coast Wings & Grill’s Average Gross Sales and Ratio of First Year Revenue to Net Investment

by Franchise Chatter on July 10, 2014

in Chicken Wings Franchise, Franchise Earnings, Restaurant Franchise



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Highlights of East Coast Wings & Grill’s Item 19 Financial Performance Representations (2014 FDD) – Part 1

Explanatory Notes for Part I – Statement of Average Annual Sales of Full-Service Franchised Restaurants Other Than Plan B Prototypes

  • The following table provides the annual average Net Sales for the periods ending December 31, 2013, December 31, 2012, December 31, 2011, December 31, 2010, December 31, 2009, and December 31, 2008, for full-service restaurants in operation as of December 31, 2013, December 31, 2012, December 31, 2011, December 31, 2010, December 31, 2009, and December 31, 2008, including one corporate store, in operation for at least 12 months as of December 31, 2013.
  • A full-service restaurant is a location designed to utilize wait staff.
  • Plan B prototypes are units East Coast Wings & Grill approves in a market where the population living within a 3-mile radius is less than 16,000 people or the unit has less than 70 seats, and services the entire East Coast Wings & Grill menu. East Coast Wings & Grill no longer develops Plan B prototypes.
  • The table also lists the number of franchised full-service restaurants included in the average Net Sales figure, the highest and lowest Net Sales achieved, and the percentage of locations achieving the average.
  • “Net Sales” reflects the total average annual sales for the franchised full-service restaurants included in the sample; East Coast Wings & Grill does not include sales tax.
  • Variations among franchisees may be caused by a variety of factors such as location, demographics, general economic conditions, weather conditions, inventory mix, competition, and other factors, as well as the efforts of the individual franchisees and their staffs.
  • East Coast Wings & Grill has not audited these franchisee-prepared results, which have been reported to it by its franchisees, but it has no reasonable basis to question their reliability.
  • The stores used in the 2013, 2012, 2011, 2010, 2009, and 2008 statements are located in North Carolina.

Explanatory Notes for Part II – Ratio of First Year Revenue to Net Investment

  • The following table provides the ratio of first year revenue (“Total Revenue”) to total investment made by the franchisees (“Total Investment”) for all new restaurants (defined below) during their first entire calendar year of operation (“Period”) for those restaurants developed during 2009-2013.
  • All but 1 of the otherwise eligible restaurants submitted their information and are included in the sample.
  • Total Revenue is defined as the total average revenue for the New Restaurants during the Period less sales tax and service charges.
  • Total Investment is defined as the total dollars spent by the New Restaurants through opening — including Initial Franchise Fees — less any tenant improvement allowances received from the landlord.
  • The term New Restaurants includes all franchise restaurants during their first year of operation and does not include any restaurants owned by East Coast Wings & Grill or any of its affiliates, operating for less than the entire Period, or conversion franchises where the leased premises was already outfitted as restaurant space prior to the location becoming a franchise.
  • The restaurants used in this financial performance statement are located in North Carolina and Texas.

Part I – Statement of Average Annual Sales of Full-Service Franchised Restaurants Other Than Plan B Prototypes

2013



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