How is the 'Adjusted EBITDA' calculated for Bigfoot Forestry?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 Financial Performance Representation - 1 Company-Owned Outlet | |||
|---|---|---|---|
| Financial Performance Metric | |||
| GROSS SALES | $738,204 | 100% | |
| COGS | $4,170 | 0.6% | |
| GROSS PROFIT | $734,034 | 99.4% | |
| OPERATING EXPENSES | Actual Marketing | $15,697 | 2.1% |
| Administrative | $10,125 | 1.4% | |
| Equipment Maintenance/Repairs | $10,886 | 1.5% | |
| Fuel | $40,941 | 5.5% | |
| Insurance | $15,211 | 2.1% | |
| Labor | $239,810 | 32.5% | |
| Occupancy | $12,360 | 1.7% | |
| Total | $345,030 | 46.7% | |
| EBITDA | $389,004 | 52.7% | |
| IMPUTED FEES & COSTS | Brand Fund Fees | $7,382 | 1.0% |
| Imputed Marketing | $0 | 0.0% | |
| Royalty Fees | $44,945 | 6.1% | |
| Technology Fees | $0 | 0.0% | |
| Total | $52,327 | 7.1% | |
| ADJUSTED EBITDA | $336,677 | 45.6% |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–39)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, Adjusted EBITDA is a key financial performance metric. For Bigfoot Forestry, it is calculated by starting with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and then subtracting Imputed Fees & Costs. EBITDA itself is calculated as Gross Profit minus Operating Expenses. Gross Profit is Gross Sales less COGS (Cost of Goods Sold). Operating Expenses include costs like actual marketing, administrative expenses, equipment maintenance/repairs, fuel, insurance, labor, and occupancy costs. Imputed Fees & Costs are not actual expenses but are included to represent what a franchised outlet would typically incur, covering items like Brand Fund Fees, Imputed Marketing expenses, Royalty Fees, and Technology Fees.
For a prospective Bigfoot Forestry franchisee, understanding this calculation is crucial because it provides a standardized way to evaluate the potential profitability of a franchise location. The FDD includes this calculation based on the performance of the company-owned outlet. By deducting these 'imputed' costs, the Adjusted EBITDA aims to show a more realistic financial picture for a franchisee, who would be subject to these fees that the company-owned outlet might not directly pay. This allows potential franchisees to compare the financial performance of the company-owned outlet to what their own franchise might achieve under similar conditions.
The 2025 FDD presents a detailed breakdown of these calculations for the company-owned outlet during the measuring year (January 1, 2024 to December 31, 2024). For example, the company-owned outlet had Gross Sales of $738,204 and COGS of $4,170, resulting in a Gross Profit of $734,034. After subtracting total Operating Expenses of $345,030, the EBITDA was $389,004. Then, Imputed Fees & Costs totaling $52,327 were subtracted, resulting in an Adjusted EBITDA of $336,677. These figures provide a benchmark, but the FDD clearly states that individual results may vary, and there is no guarantee a franchisee will earn as much.