Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk: Our Latest Views on Liquid Nutrition’s Average Annual Sales and Comparable Sales Growth (2014 FDD)

by Franchise Chatter on March 28, 2015

in Franchise Earnings, Smoothie Franchise



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Liquid Nutrition Photo 2 by top40woodworks.com

Highlights of Liquid Nutrition’s Item 19 Financial Performance Representations (2014 FDD) – Part 1 of 3

  • The franchise offered is for the establishment and operation of a nutritional food, smoothie, juice, vitamins, and supplement store combining a health food bar offering functional beverages such as nutritional and meal replacement smoothies, juices, other nutritional drinks, and healthy on-the-go food items, with a health supplement and vitamin retail business.
  • Tables A to D of this Item set forth certain historical operating information for all 5 franchised Liquid Nutrition stores (“Representative Stores”) that have been continuously open and operating for at least 36 months as of December 31, 2013.
  • For these Tables, the data below represents the periods of operation from January 1, 2011 to December 31, 2011 (“2011 Measurement Period”), January 1, 2012 to December 31, 2012 (“2012 Measurement Period”), and January 1, 2013 to December 31, 2013 (“2013 Measurement Period”) (collectively, the 2011 Measurement Period, 2012 Measurement Period, and 2013 Measurement Period are referred to as the “Measurement Period”).
  • The Representative Stores were opened by Liquid Nutrition’s affiliate and were sold to a franchisee in September of 2011.
  • The success of your franchise will depend largely upon your individual abilities and your market, and the financial results of your franchise are likely to differ, perhaps materially, from the results summarized in this Item.
  • Liquid Nutrition believes that the following financial data has been compiled using generally accepted accounting principles, but it has not audited the data and no assurance can be offered that the data does not contain inaccuracies that an audit might disclose.
  • Additionally, this Item does not contain certain expense and operating cost information, including Royalty Fees and Marketing Fund Contributions that you will incur as franchisees.
  • All of the Representative Stores used in this Item are located in Montreal, Canada. The monetary amounts in this Item were converted to US Dollars from Canadian Dollars using the average conversion rate for each calendar year.

Explanatory Notes for Table A – Statement of Average Annual Sales of Representative Stores

  • The following table provides the annual Average Gross Sales for the Representative Stores for the Measurement Period.
  • “Gross Sales” means the aggregate of all revenue, whether collected or not, from the sale of products and services, including gift cards, from all sources in connection with your franchised store, including all proceeds from any business interruption insurance for each Representative Store.
  • Gross Sales excludes:
  • (a) all refunds made in good faith,
  • (b) any sales and equivalent taxes that are collected by the Representative Store for or on behalf of any governmental taxing authority and paid thereto,
  • (c) the value of any allowance issued or granted to any customer of the Representative Store that is credited by the Representative Store in full or partial satisfaction of the price of any products and services offered in connection with your franchised store, and
  • (d) any rebate received by the Representative Store from a manufacturer or supplier.
  • Average Gross Sales was calculated by combining the total Gross Sales for each Representative Store during each Measurement Period and dividing it by the total number of Representative Stores included in each sample.

Explanatory Notes for Table B – Statement of Comparable Sales Growth of Representative Stores

  • Comparable Store Growth was calculated by:
  • (a) dividing the total Gross Sales for each Representative Store for the 2013 Measurement Period by the total Gross Sales for each Representative Store for the 2012 Measurement Period and converting that number into a percentage, and
  • (b) dividing the total Gross Sales for each Representative Store for the 2012 Measurement Period by the total Gross Sales for each Representative Store for the 2011 Measurement Period and converting that number into a percentage.
  • Average Comparable Store Growth was calculated by combining the Comparable Store Growth for each Representative Store and dividing it by the total number of Representative Stores included in the sample.

Table A – Statement of Average Annual Sales of Representative Stores

2013



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