Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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FDD Talk: Our Latest Views on the Actual Sales, Expense and Profit Percentages of J. Gilbert’s Wood-Fired Steaks & Seafood Restaurants (2015 FDD)

by Franchise Chatter on April 9, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Restaurant Franchise

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Highlights of J. Gilbert’s Wood-Fired Steaks & Seafood’s Item 19 Financial Performance Representations (2015 FDD) – Part 2 of 2

  • Gross Sales. The figures in “Gross Sales” represent sales of all food and beverage items.
  • Total Cost of Sales. The figures in “Total Cost of Sales” consist of food usage costs and bar usage costs. The figures in “Food Cost” and “Bar Cost” represent the annual costs of food and bar items experienced by company-owned Restaurants during a 12-month period.
  • Food costs include costs of all food, spices, and other food items used in meal preparation and all non-alcoholic beverages.
  • Food costs may vary depending upon a Restaurant’s location, menu, regional and seasonal variances in prices, temporary shortages, participation in cooperative or distribution programs, and control over costs.
  • Bar costs include the costs of bar mixes, liquor, wine, beer, and bar food.
  • The food and bar costs experienced by company-owned Restaurants reflect benefits and economies of scale which the company-owned Restaurants derive as a result of being operated on a consolidated basis.
  • You may negotiate different terms with your suppliers and thus experience different costs.
  • Total Labor. These figures represent the annual labor costs experienced by company-owned Restaurants, and include Back of House hourly labor, Front of House hourly labor, management salaries and bonuses, training, and fringe benefits.
  • Labor costs vary widely depending on many factors. Your labor costs will also be affected by the amount of vacation time and vacation pay that you provide to your employees, the rate of employee turnover, the local labor market, applicable minimum or “living” wage laws and health or other mandated benefits, and your control over costs.
  • Controllable Expenses. These figures include utilities, contracted services, repairs and maintenance costs, operating supplies, promotional expenses, and other miscellaneous expenses.
  • Excluded Costs. In addition to the categories of expenses listed in this financial performance representation and discussed above, you should take into consideration other types of costs, including those listed below. The following costs are not included in this financial performance representation:
  • Other Operating Expenses. This financial performance representation does not include other operating expenses such as rent, general liability insurance, depreciation (for fixtures, furnishings, equipment, and leasehold improvements), real estate taxes, common area maintenance, licenses and permits, and other miscellaneous expenses.
  • General and Administrative Costs. This financial performance representation does not include the general administrative overhead costs and expense of J. Gilbert’s support center — e.g., accounting, executive management (corporate office employee salaries and benefits, legal and other expenses), and general office and clerical expenses.
  • Franchised Restaurant Fees. This financial performance representation does not include initial franchise fees, development fees, royalty fees, and marketing fund contributions and expenditures payable by franchisees because company-owned Restaurants are not required to pay such fees. You must pay such fees to the franchisor.
  • Insurance Costs. This financial performance representation does not reflect the insurance costs of company-owned Restaurants.

Statement of Profit After Controllable Expenses of Company-Owned J. Gilbert’s Restaurants (September 29, 2013 to September 28, 2014)

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