FDD Talk 2014: Our Latest Views on Big Boy’s Average Gross Sales, Food Costs, and Labor Costs

Highlights of Big Boy’s Item 19 Financial Performance Representations (2014 FDD) – Part 1

• Table 1 represents calendar year 2011 Gross Sales for 108 Franchised and 19 Company-Owned Big Boy restaurants for the 52-week period ending December 31, 2011.

• Table 2 represents calendar year 2012 Gross Sales for 93 Franchised and 17 Company-Owned Big Boy restaurants for the 52-week period ending December 31, 2012.

• Table 3 represents calendar year 2013 Gross Sales for 82 Franchised and 22 Company-Owned Big Boy restaurants for the 52-week period ending December 29, 2013.

• Table 4 represents a breakdown of 2013 Gross Sales Distribution by the 82 Franchised and 22 Company-Owned Big Boy restaurants.

• Table 5 represents a percentage breakdown for the 82 Franchised and 22 Company-Owned Big Boy restaurants tiered within Gross Sales levels.

• Table 6 represents 2013 Weekly Gross Sales for all Franchised and Company-Owned Big Boy restaurants.

• Table 7 represents certain average Cost Information for 22 Company-Owned Big Boy restaurants operating all twelve months in 2013.

• “Gross Sales” means the entire amount of business revenue generated by the unit less discounts and bad debts.

• There were 82 Franchised and 22 Company-Owned restaurants with 12 months of actual sales in 2013 reported in this table. Not reported were 3 units that were either closed a short period for remodeling, and/or transferred from a Franchise Unit to a Company-Owned Unit.

• The sales levels, sales averages, and median sales shown reflect the experience of certain Franchised and Company-Owned restaurants and should not be considered as the actual or potential sales that you will realize. Big Boy Franchise Management LLC does not represent that you can expect to attain any particular sales level. Results for a new franchisee may differ from the results stated in the financial performance representation.

• You should also be aware that the financial performance of any particular Unit might be affected by a number of factors that may vary due to the individual characteristics of the site. The factors include, but are not limited to:

• competition from other businesses;
• location of your site;
• your experience;
• the quality and effectiveness of your managerial skills;
• your decisions with respect to location, additional advertising programs, personnel, and cost controls;
• adherence to the operation systems, geographic, and socioeconomic conditions in your locality;
• business cycles;
• and the performance of the local, national, and world economy.

• Gross Sales are based on the actual sales received from all 104 restaurants operating 12 months during 2013.

• “Food Costs” means all food and beverage purchased to produce the menu items sold at Company-Owned restaurants.

• “Hourly Labor Costs” means the actual wages for all production and service team members working in the Company-Owned restaurants but excluding the Managers and also excluding other personnel costs such as training, incentive pay, employee benefit expense, vacation pay, workers compensation expense, payroll tax expense, 401K/pension expense, life insurance expense, and health insurance expense.

Table 1 – 2011 Sales Distribution (Annual Sales)