Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

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FDD Talk: Our Latest Views on the Profit and Loss Statement for Franchised Rent-A-Wreck “Profit Group” Locations (2014 FDD)

by Franchise Chatter on March 17, 2015

in Car Rental Franchise, Franchise Earnings

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Rent-A-Wreck of Cambridge from visitdorcheseter.org

Highlights of Rent-A-Wreck’s Item 19 Financial Performance Representations (2014 FDD) – Part 3 of 3

  • The information in Table 3 below relates to the historic performance of the entire Rent-A-Wreck system for the 12-month period ended July 31, 2014 (the “2014 Sample Period”) and presents actual, unaudited revenue and expense information provided by existing Rent-A-Wreck franchise owners who participated in the optional Rent-A-Wreck Profit Group analysis of operating results.
  • There were 93 open and operating Rent-A-Wreck Franchised Businesses during the entire 2014 Sample Period.
  • Fifteen franchise owners (“Submitters”), including two multi-unit operators, participated in the Profit Group and provided the franchisor with complete revenue and expense reporting information for 22 Franchised Businesses (approximately 24% of the total number of Franchised Businesses) for each month of the 2014 Sample Period.
  • All Submitters, including the multi-unit operators, provided information used in Table 1A (in Part 1) separately for each Franchised Business that they operate.
  • For Table 3, the two multi-unit operators provided aggregate revenue and expense information covering all of the Franchised Businesses that they operate.
  • Rent-A-Wreck has not audited or otherwise verified the information provided to it by the 15 participating Submitters.
  • “Total Revenue” includes time and mileage charges received from customers; revenues from sales of loss damage waivers and optional insurance products; special charges such as Underage Driver’s Fees and Additional Driver’s Fees; fees received from rentals of GPS devices; discounts and refunds; and other miscellaneous rental revenue.
  • 6 (or 67%) met or exceeded the Average Total Revenue presented in Table 3, and 8 (or 53%) met or exceeded the Average Profit in Table 3.
  • The two multi-unit operators met or exceeded the Average Total Revenue and Average Profit presented in Table 3 and are included in the disclosure of the total number of “Submitters that met or exceeded” those figures.
  • “Cost of Goods Sold” includes vehicle expenses, including depreciation, interest, maintenance, fleet insurance, and franchise fees.
  • “Personnel Expenses” include salaries and payroll, medical insurance, unemployment taxes.
  • “Marketing and Sales Expenses” include reservation system fees, online advertising, local marketing.
  • “Occupancy Expense” includes rent, security system, utilities.
  • “General and Administrative Expense” includes bank service charges, general liability insurance, legal and accounting fees.
  • The 15 Submitters and the 22 Franchised Businesses that they operate are representative of the entire Rent-A-Wreck system and include Rent-A-Wreck Businesses from a variety of geographic locations with a range of fleet sizes, sites (e.g., stand-alone or connected to an existing business, such as an automotive repair shop or car dealership), market type (local market or airport), and length of operations.
  • The market where your Rent-A-Wreck Franchised Business is located may be in a smaller urban or suburban area or at an airport. In addition, your Rent-A-Wreck Franchised Business may be operated from the site of an existing business, such as an automotive repair shop, a new or used car dealership, or a gas station.
  • Revenue, expenses, and profits can vary widely, depending upon geographic location, fleet size, site, and market type.
  • Your revenue, expenses, and profits also may vary depending upon the number of vehicle rental businesses you operate. Multi-unit operators may benefit from economies of scale and have access to vendors and purchasing terms for supplies and inventory, as well as financing terms, that may not be available to a single-unit operator.

Table 3 – Profit and Loss for Franchised Profit Group Locations (August 1, 2013 to July 31, 2014)

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