Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk: Our Latest Views on Little Sunshine’s Playhouse and Preschool’s Average EBITDA for Affiliate-Owned Schools (2015 FDD)

by Franchise Chatter on April 5, 2015

in Childcare Franchise, Education Franchise, FDD Talk 2017: Children's Franchises, Franchise Earnings



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Little Sunshine Playhouse and Preschool

Highlights of Little Sunshine’s Playhouse and Preschool’s Item 19 Financial Performance Representations (2015 FDD)

  • The table below presents information about Schools that were in operation for at least 18 months as of December 31, 2014, for the 2013 and 2014 calendar years. This information is not audited.
  • Little Sunshine’s Affiliates operate 5 Schools of the 10 currently in operation.
  • The first Affiliate School opened in 2002 and has been in continuous operation since that time. One Affiliate School has been in continuous operation since 2009 and the remaining 3 Affiliate Schools have been in continuous operation since 2010.
  • All the Affiliate Schools operate year-round.
  • As of December 31, 2014, there are 5 franchised Schools. One School has been in operation since 2005, another School since the latter half of 2012, and 3 more since 2014.
  • The data from the first franchised School is not included in this financial performance representation because it is unlike the Affiliate Schools and the future franchised Schools. This School was not constructed according to Little Sunshine’s standards and specifications, the size of the School is smaller than the prototype School building, and the market is smaller than Little Sunshine’s recommended market.
  • The other 4 franchised Schools are not included in this financial performance representation because they have not been in operation for a full 18 months as of December 31, 2014.
  • If you are a new Little Sunshine’s franchisee, your School’s financial results are likely to differ from those of the Affiliate Schools.
  • The franchisor derived all Affiliate School revenue and expense data from information in the Affiliate’s possession. This information is unaudited, but the franchisor believes that the information is accurate and reliable.
  • The Affiliate Schools are operated by owners that have vast experience in School management. The Affiliate Schools do not pay the royalty on revenues that franchisees pay on their revenues.
  • EBITDA is defined as “Earnings Before Interest, Taxes (income tax), Depreciation, and Amortization.”
  • Three out of the 5, or 60%, of the Affiliate Schools performed at or above the average EBITDA for all Affiliate Schools for the 2013 calendar year.
  • Two out of the 5, or 40%, of the Affiliate Schools performed at or above the average EBITDA for all Affiliate Schools for the 2014 calendar year.
  • The EBITDA of your School and other franchised Schools may vary widely from the Affiliate School and any other franchised and company-owned Schools the franchisor or its Affiliates develop in the future for a number of reasons, including differences in:
  • operational experience and ability;
  • capital;
  • financing;
  • training;
  • region of the country;
  • location and site criteria;
  • demographics;
  • physical condition and size of your School;
  • whether your School provides services to low-income or high-income students;
  • the number of Program Directors and other employees you hire;
  • the salaries, wages, and other benefits you pay to them;
  • how many of them are full-time and part-time employees;
  • the salaries and wages you pay your owners;
  • amounts spent on local marketing, advertising, and promotion;
  • varying costs of equipment and related accessories;
  • the payment of royalty fees to the franchisor (which company-owned and Affiliate-owned Schools do not pay); and
  • the payment of any marketing contribution to the franchisor.

Average EBITDA for Affiliate-Owned Schools



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