In the Bang Cookies FDD, what is the definition of an 'Outlet'?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
- (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:
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 50–53)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, an Outlet refers to a Bang Cookies Shop that is either a Company Owned Outlet or a Franchise Outlet, depending on the context. A Company Owned Outlet is one that Bang Cookies owns directly or indirectly through an affiliate or person identified in Item 2 of the FDD. This definition also includes outlets operated as joint ventures or managed by Bang Cookies, its affiliates, or individuals listed in Item 2. A Franchise Outlet, on the other hand, is a Bang Cookies Shop operated under a Franchise Agreement but not owned by the company.
This distinction is important for prospective franchisees because the financial performance data presented in Item 19 differentiates between Company Owned Outlets and potential Franchise Outlets. Understanding the definition of each type of outlet helps in interpreting the financial performance representations accurately. For example, the FDD mentions that during the 2023 calendar year, Bang Cookies had four Company Owned Outlets, with financial details provided for two of them, excluding a small-scale kiosk at Newark Airport.
Knowing whether an outlet is company-owned or franchised is crucial when evaluating the financial data provided. The performance of Company Owned Outlets may not be directly indicative of how a franchised location will perform due to differences in operational control, investment, and other factors. Therefore, prospective franchisees should carefully consider these definitions when reviewing the financial performance representations and discussing potential earnings with Bang Cookies.