Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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  • Orange Leaf Frozen Yogurt
  • Planet Fitness
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FDD Talk 2014: Our Latest Views on Painting with a Twist’s Average Expenses and Operating Profits

by Franchise Chatter on September 16, 2014

in Art-Related Franchise, Franchise Earnings



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Painting with a Twist Franchise Photo

Highlights of Painting with a Twist’s Item 19 Financial Performance Representations (2014 FDD) – Part 2

Explanatory Notes for Part III – Expense Reports for Reporting Franchisees

  • The chart below presents the Expense Reports for Reporting Franchisees in which Painting with a Twist had accurate data regarding Payroll information during the Measurement Period categorized as either Single or Multi-Unit Owners.
  • “Average Annual Gross Revenue” is defined as the sum of the Annual Gross Revenue of the Reporting Franchisees divided by 55, the number of Reporting Franchisees.
  • “Average Total Payroll” is defined as the average amount each Reporting Franchisee allocated to paying the salaries of its employees, including its artist, assistant, office help, manager and/or owner, where applicable, during the Measurement Period.
  • “Class Operating Supplies” is defined as the average amount paid by each Reporting Franchisee in the Measurement Period to cover all supplies needed to operate the classes offered by their respective location.
  • “Charitable Donations” are defined as the average amount paid by each Reporting Franchisee in the Measurement Period to charitable sources.
  • “Rent” includes the rent paid by the Reporting Franchisee per year, but does not include amounts paid for utilities, repairs or maintenance.
  • “Operating Profit” was calculated by taking the average of the result of the following calculation for each Reporting Franchisee:
  • (i) begin with Total Annual Gross Revenue; and
  • (ii) subtract the following average expenses: total payroll, class operating supplies, charitable donations, and rent.
  • Not included in these calculations are the following expenses:  franchise payments (including royalties and advertising fees), payroll taxes and other employee benefits, licenses, utilities, insurance, depreciation on fixed assets, financing costs, accounting and legal expenses, and debt repayment. Such expenses will affect the net income and cash flow of your business.

Explanatory Notes for Part IV – Income Earned From Studio Prior to Grand Opening

  • The chart below presents the amount of income earned from the Painting with a Twist Studio by 24 of the Reporting Franchisees prior to their respective Grand Opening. The franchisor only included 24 of the 55 Reporting Franchisees because these 24 are the only Reporting Franchisees of which the franchisor has accurate data regarding income earned from their Painting with a Twist Studios prior to their respective grand openings.
  • “Total Revenue” is defined as the amount the Reporting Franchisee received in sales from payments made prior to the store’s grand opening.
  • “Reservations” is defined as the amount of Total Revenue derived by the Reporting Franchisee prior to the store’s grand opening that was allocated to payment for class reservations.
  • “Gift Certificates” is defined as the amount of Total Revenue derived by the Reporting Franchisee prior to the store’s grand opening that was allocated to gift certificate purchases.

Part III – Expense Reports for Reporting Franchisees

All



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