What does the Bang Cookies FDD consider to be 'Labor Cost'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
te Franchise Shop Location.
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- (g) Labor Cost means the gross wages paid to employees in connection with the preparation and service of menu items. "Labor Cost" includes gross wages paid to general managers and assistant managers.
- (h) Outlet refers to a Bang Cookies Shop that is either a Company Owned Outlet or a Franchise Outlet, as the context requires.
BASES AND ASSUMPTIONS
The financial information was not prepared on a basis consistent with generally accepted accounting principles. We do not have any Franchise Outlets. Data for our Company Owned Outlet is based on information reported to us by our affiliate. The information in this analysis has not been audited, is based on historical financial data and is not a forecast or projection of future financial performance.
COMPANY OWNED OUTLET
During the 2023 Calendar Years we had four total Company Owned Outlets, three were open and operating for the full calendar year. Of those three, the Newark Airport location is a small-scale kiosk that is not indicative of a franchise offering and is therefore excluded. Our two remaining Company Owned Outlets are detailed below:
Table 1
| | 275 square foot outlet | Total | %1 | |---|---|---|---| | Income | | | | | Revenue Retail | | $612,754.77 | | | Aggregators | | $87,588.79 | | | Gross Revenue | | $700,343.56 | | | | | | | | Prime Costs | | | | | COGS | | $154,075.59 | 22.00% | | Payroll | | $148,168.49 | 21.16% | | Total Prime Costs | | $302,244.08 | 43.16% | | | | | | | Franchisee Expenses | | | | | Royalty Fee2 | | $42,020.61 | 6% | | Brand Fund3 | | $14,006.87 | 2% | | | | | | | Net Before Rent & | Notes to Table: Footnote 1 - “%” represents the percentage of Gross Revenue. Footnote 2 - Royalty Fee is equal to 6% of Gross Revenue. Footnote 3 – Brand Fund is equal to 2% of Gross Revenue. | $342,072.00 | 48.84% | | Operational | | | | | Expenses | | | | Notes to Table:
Footnote 1 - "%" represents the percentage of Gross Revenue.
Footnote 2 - Royalty Fee is equal to 6% of Gross Revenue.
Footnote 3 – Brand Fund is equal to 2% of Gross Revenue.
Table 2
| 800 square foot outlet | Total | %1 | |
|---|---|---|---|
| Income | |||
| Revenue Retail | $446,524.08 | ||
| Aggregators | $10,932.98 | ||
| Gross Revenue | $457,457.06 | ||
| Prime Costs | |||
| COGS | $100,640.55 | 22.00% | |
| Payroll | $120,644.93 | 26.38% | |
| Total Prime Costs | $221,305.48 | 48.38% | |
| Franchisee Expenses | |||
| Royalty Fee2 | $27,447.42 | 6.00% | |
| Brand Fund3 | $9,149.14 | 2.00% | |
| Net Before Rent & | Notes to Table: Footnote 1 - “%” represents the percentage of Gross Revenue. Footnote 2 - Royalty Fee is equal to 6% of Gross Revenue. Footnote 3 – Brand Fund is equal to 2% of Gross Revenue. |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 50–53)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, Labor Cost is defined as the gross wages paid to employees in connection with preparing and serving menu items. This definition specifically includes the gross wages paid to general managers and assistant managers. This is an important factor for prospective franchisees to consider when evaluating the potential profitability of a Bang Cookies franchise.
In addition to the general definition of Labor Cost, the FDD also defines 'In Shop Labor Cost' as the gross wages, benefits, and associated payroll taxes paid to on-site restaurant location employees who are involved in the preparation and service of menu items. However, this excludes wages paid to bakery location or commissary kitchen employees if they pre-prepare menu items that are then delivered to the restaurant. This distinction is relevant for franchise shops operating as Satellite Locations, where menu items might be pre-prepared at a Bakery Location and then finished at the Satellite Location.
For Company Owned Shops that are serviced by a corporate commissary, the In Shop Labor Cost does not include the labor costs associated with commissary kitchen employees who pre-prepare menu items that are delivered to the Company Owned Shops for final preparation and service. Understanding these nuances in labor cost definitions is crucial for franchisees to accurately assess their potential operating expenses and profitability. The Item 19 includes financial performance representations from two company owned locations. The payroll costs for a 275 square foot outlet were $148,168.49, representing 21.16% of gross revenue. The payroll costs for an 800 square foot outlet were $120,644.93, representing 26.38% of gross revenue.