Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk 2014: Our Latest Views on Taco John’s Average Gross Sales and Cost of Goods Sold

by Franchise Chatter on December 10, 2014

in Franchise Earnings, Mexican Restaurant Franchise



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Taco John's 2

Highlights of Taco John’s Item 19 Financial Performance Representations (2014 FDD)

Explanatory Notes for Chart 1 – Average Sales of Taco John’s Restaurants with Drive-Thru Windows During Calendar Year 2013

  • Included in the Chart 1 below are all of the 198 Taco John’s Restaurants with drive-thru windows that reported sales to the franchisor through its QuikServe Point of Sale System for all of calendar year 2013. Seven of these Restaurants are company-owned and operated.
  • Of these Restaurants, 184 are freestanding Taco John’s Restaurants, 10 are end-cap Restaurants, 2 are Taco John’s Restaurants attached to a convenience store, and 2 are Taco John’s Restaurants located in Travel Plazas.
  • Taco John’s had a total of 402 Restaurants in its system as of December 31, 2013. Restaurants not included in this statement either do not report their sales through Taco John’s QuikServe Point of Sale System or do not have drive-thru windows as part of their Restaurants.
  • Taco John’s only used in this statement Restaurants that report their sales through its QuikServe Point of Sale System because it believes the sales figures it receives from those Restaurants are more reliable. Further, the franchised Taco John’s Restaurants offered pursuant to the Disclosure Document are required to use only the approved Point of Sale System to report their sales.
  • Taco John’s only used in this statement Restaurants with drive-thru windows as part of their Restaurants as it is currently promoting these types of Restaurants. The franchised Taco John’s Restaurants offered pursuant to the Disclosure Document will most likely have a drive-thru window as part of the Restaurant.
  • “Sales” means the total receipts of the Restaurant, but does not include sales tax or equivalent taxes.
  • The Taco John’s Restaurants included in this statement sell substantially the same products and services as the franchised Taco John’s Restaurants offered pursuant to the Disclosure Document.
  • As of the start of calendar year 2013, the Taco John’s Restaurants included in this statement had been in operations for periods ranging from one year to 44 years.
  • There is a large variation in the range of sales generated by Taco John’s franchisees during calendar year 2013. During calendar year 2013, sales by the Taco John’s Restaurants reported in the statement varied from a high of $3,695,362 to a low of $269,857.

Explanatory Notes for Chart 2 – Total Number and Percentage of Taco John’s Restaurants That Exceeded the Average Sales of the Group

  • Chart 2 below indicates the total number of Restaurants that were used in computing the total averages and the averages of the Top Quartile, Second Quartile, Third Quartile, and Lower Quartile in this statement, together with the number of those Restaurants and percentage in each sector that met or exceeded the average sales levels of all of the Restaurants in the applicable sector.
  • The sales information for the Restaurants included in this statement is information as reported by the franchisees and has not been audited or otherwise verified by Taco John’s. This statement is only a statement of sales at Taco John’s Restaurants and is not a statement of profits or earnings.
  • Taco John’s shows no expenses in this statement. It cannot accurately determine expenses because franchisees do not report expenses to it.

Explanatory Notes for Chart 3 – Cost of Goods Sold as a Percentage of Net Sales for Taco John’s Company Restaurants

  • Chart 3 below describes the Cost of Goods Sold as a percentage of Net Sales for the annual period ending December 31, 2013 for 8 free-standing Taco John’s Restaurants owned and operated by the franchisor.
  • The Taco John’s Restaurants included in this statement sell substantially the same products and services as the franchised Taco John’s Restaurants offered pursuant to the Disclosure Document.
  • The Taco John’s Restaurants included in Chart 3 are located in Colorado, Wyoming, and Illinois.
  • “Net Sales” means the total sales of the Restaurant, including all receipts from sales made at or away from the premises of the Restaurant but does not include sales tax or equivalent taxes.
  • “Cost of Goods Sold” means all paper, food, beverages, and condiments that are purchased to make up the products sold in a Taco John’s Restaurant or made available for consumption at the salsa bars.

Chart 1 – Average Sales of Taco John’s Restaurants with Drive-Thru Windows During Calendar Year 2013

Top Quartile



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