For the purpose of Item 19 in the Azal Coffee FDD, what does the actual gross sales include?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
fer. There is no assurance that you'll earn as much.**
For purposes of this Item 19, the actual gross sales includes the total revenue of V60's Store without deduction for Michigan's 6% sales tax and tips remitted to employees, but are otherwise net of other discounts for rewards, comps, returns, and employee meals. Sales tax in your state may be different.
The figures in the table were prepared by management of V60 and were not audited. V60 does not pay us royalty, marketing, or technology fees.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 47–48)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Item 19 provides details regarding the financial performance of V60, an affiliate of Azal Coffee. For the purpose of Item 19, gross sales include the total revenue of V60's store, without deducting Michigan's 6% sales tax and tips remitted to employees. However, gross sales are net of other discounts for rewards, comps, returns, and employee meals. It is important to note that sales tax may vary in other states. The gross sales figures provided in Item 19 are based on historical, unaudited monthly gross sales information from January 1, 2024, through May 31, 2024, for V60's store in Dearborn, Michigan.
It is important to understand that these gross sales figures do not reflect the actual potential income of an Azal Coffee store and should not be relied upon when calculating profitability. Prospective franchisees should consider the various fixed and variable costs associated with operating a store, which are not fully reflected in the provided information. These expenses can include costs outlined in Items 6 and 7 of the FDD, such as royalty fees, marketing fund fees, interest or finance charges, depreciation, occupancy costs, store supplies, credit card fees, insurance, taxes, technology fees, accounting and legal fees, preopening costs, training costs, regulatory compliance costs, management costs, fringe benefits, and repairs and maintenance.
Azal Coffee emphasizes that a franchisee's individual results may differ, and there is no assurance that a franchisee will earn as much as V60. Several factors can influence financial performance, including location, local market conditions, the physical capacity of the space, the dedication and experience of the management and employees, competition, the state of the economy, pricing strategies, and the goods and services offered. Prospective franchisees are strongly encouraged to consult with financial advisors to review the provided information and estimate the additional expenses they will incur in establishing and operating an Azal Coffee store. Written substantiation for the financial performance representation will be made available to you on reasonable request.