What expenses are NOT reflected in the Gross Sales figures reported for Annex Brands franchises?

According to Annex Brands' 2025 Franchise Disclosure Document, the Gross Sales figures reported do not account for several significant expenses. These exclusions provide a clearer picture of revenue generation but require careful consideration of additional costs to determine actual profitability.

Specifically, the Gross Sales figures exclude cost of sales, payroll and related expenses, rent, office expenses, amortization, depreciation, income taxes, and debt service obligations. This means that while the reported Gross Sales figures may appear substantial, a franchisee must factor in these additional expenses to understand their net income or profit. For example, while Chart 1 shows that the average annual gross sales for all franchised centers that attended the 2023 National Convention was $407,000, this does not account for rent or payroll expenses.

Prospective franchisees should be aware that these exclusions are standard practice in financial performance representations. It is essential to conduct thorough due diligence, including creating a detailed business plan with realistic expense projections, to assess the true financial viability of an Annex Brands franchise. Consulting with financial and legal advisors is highly recommended to fully understand the implications of these exclusions and to make informed decisions.