Do the financial performance representation figures for All States M.E.D. reflect operating expenses?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
The financial performance representation figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised business. Franchisees or former franchisees, listed in the Franchise Disclosure Document, may be one source of this information.
Written substantiation for this financial performance representation is available to you upon reasonable written request.
Some outlets have earned these amounts. Your individual results may differ. There is no assurance that you will earn as much.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 39–42)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 Franchise Disclosure Document, the financial performance representation figures provided do not reflect all the expenses a franchisee will incur. The figures do not account for costs of sales, operating expenses, or other costs that must be deducted to determine net income or profit. The FDD advises prospective franchisees to conduct their own independent investigation into the costs and expenses associated with operating an All States M.E.D. franchise. Franchisees and former franchisees are listed in the document as potential sources of information.
The FDD includes historical financial performance data from the one affiliated company store outlet. For example, in 2022, the Gross Revenue for the Miami Lakes, FL location was $832,521. The document then deducts expenses that would be incurred if the outlet were a franchised location, specifically Royalties (8% of Gross Revenues, which amounted to $66,602) and Local Advertising (the greater of $12,000 or 2% of Gross Revenues, which amounted to $16,650). The total franchisee expenses were $83,252. These adjustments result in an Adjusted Gross Revenue figure.
It is important to note that while the financial performance representation provides Gross Revenue and Adjusted Gross Revenue figures, these are not indicative of net profit. A prospective All States M.E.D. franchisee must account for additional expenses such as cost of goods sold, salaries, rent, utilities, and other operating costs to determine their potential profitability. The FDD emphasizes that individual results may vary and there is no guarantee of earning as much as the figures presented. Therefore, due diligence and thorough financial planning are essential before investing in an All States M.E.D. franchise.