What charges are included in the 'Occupancy' definition for an Amorino franchise?

According to Amorino's 2025 Franchise Disclosure Document, 'Occupancy' is defined as all charges imposed under the lease agreements. This includes base rent, percentage rent, and common area maintenance charges. This definition is important for prospective franchisees to understand as they evaluate the financial performance representations provided in Item 19 of the FDD. The franchisor uses this definition to calculate average occupancy costs for existing stores.

Understanding what constitutes 'Occupancy' is crucial for budgeting and financial planning. Base rent is the fixed amount paid regularly, while percentage rent is a variable amount based on a percentage of the store's revenue. Common area maintenance (CAM) charges cover the costs of maintaining shared spaces in a shopping center or building, such as parking lots, hallways, and restrooms. These charges can fluctuate, impacting the overall profitability of the Amorino franchise.

Amorino calculates the average occupancy cost by summing the occupancy costs of included franchisees and dividing by the number of stores. This average is then expressed as a percentage of average net revenues. Prospective franchisees should carefully consider these occupancy costs and how they might vary based on location, size, and lease terms, as noted in the general notes to Item 19. Rent costs can vary significantly depending on these factors, so it is essential to conduct an independent investigation and consult with a financial advisor to determine potential profitability.