Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk: Our Latest Views on the Annual Sales, Expenses, and Operating Income of a Liquid Nutrition Multi-Unit Owner (2014 FDD)

by Franchise Chatter on April 2, 2015

in Franchise Earnings, Smoothie Franchise



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Liquid Nutrition Photo by urbanspoon.com

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

Explanatory Notes for Table E – Data for Multi-Unit Owner

  • The following table provides the actual costs of the Multi-Unit Owner during the 2013 Measurement Period. The following table also provides the sales and net income earned by the Multi-Unit Owner during the 2013 Measurement Period.
  • The Multi-Unit Owner currently operates 3 Stores in Montreal, Canada. The results for all 3 Stores were calculated together.
  • No adjustments were made to the numbers below, despite the fact that one Store:
  • (i) is located on the campus of a university;
  • (ii) suffers from low sales during the summer, when students are not in classes and the Store has reduced hours with no weekends; and
  • (iii) also suffers from low sales during the equivalent of 6 weeks during the school year that students are not in attendance (e.g. during the winter holiday).
  • The Multi-Unit Owner is the only franchisee in the system that currently operates more than one Store, and the data below is based on the Multi-Unit Owner’s profit and loss statement provided to Liquid Nutrition.
  • The Multi-Unit Owner actually obtained the results below but there were no other multi-unit owners to which Liquid Nutrition could compare these results. As such, there is no data to show what units fell above or below the Multi-Unit Owner’s historical performance.
  • Since you may be operating a single Store and you will be operating a start-up Store, you should not expect to achieve the same sales or EBITDA as listed below.

Explanatory Notes for Table F – Gross Sales Per Square Foot for Multi-Unit Owner

  • The following table provides the gross sales per square foot of the Multi-Unit Owner during the 2013 Measurement Period.
  • The Multi-Unit Owner currently operates 3 Stores in Montreal, Canada. The results for all 3 Stores were calculated together and no adjustment was made for the Store that suffers from low sales during the summer that result from its location at a university.
  • Gross Sales Per Square Foot was calculated by dividing each of the 3 Stores’ gross sales during the 2013 Measurement Period by the total square feet of retail space for each respective Store.
  • Then, Average Gross Sales Per Square Foot was calculated by adding the Gross Sales Per Square Foot for each of the 3 Stores, and then dividing by 3.
  • Of the 3 Stores presented below, 2 Stores, or 67%, exceeded the average of $871 Gross Sales Per Square Foot during the 2013 Measurement Period.

Table E – Data for Multi-Unit Owner



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