What is the definition of a 'Company-Owned Outlet' for Bigfoot Forestry, as it relates to the FPR?

According to Bigfoot Forestry's 2025 Franchise Disclosure Document, a 'Company-Owned Outlet' is defined within the context of the Financial Performance Representation (FPR). Specifically, it refers to any Bigfoot Forestry business that is owned by (a) the franchisor, (b) their affiliate, including BigFoot Forestry, LLC, or (c) a person listed in Item 2 of the FDD, provided that this person, or another person listed in Item 2, also manages the Bigfoot Forestry business. This definition is important because the FPR uses data from both franchised and company-owned outlets to present potential financial performance. However, in 2024, the FPR data was limited to the company-owned outlet.

This distinction is crucial for prospective franchisees as it clarifies the ownership and management structure of outlets whose financial data is used in the FPR. Understanding whether an outlet is company-owned or franchised helps in assessing the applicability of the presented financial figures to a franchised operation. For instance, company-owned outlets might have different cost structures or operational practices compared to franchised outlets, which could impact financial performance.

For example, the FDD indicates that the Company-Owned Outlet did not pay brand fund fees (1% of Gross Sales), royalty fees (4.5% to 7% of Gross Sales depending on Gross Sales bracket) or technology fees ($350 per month); and (b) is not required to spend a minimum monthly amount on local marketing equal to or greater than the Local Marketing Commitment (greater of 2% of monthly Gross Sales or $1,000 per month). The FPR presents 2 sets of EBITDA figures, including: (1) "EBITDA" which is calculated based on actual expenses incurred by the Company-Owned Outlet and does not account for Imputed Fees and Costs; and (2) "Adjusted EBITDA" which, for illustrative purposes, is calculated in a manner that takes into account all Imputed Fees and Costs the Company-Owned Outlet would have incurred if it were a Franchised Outlet. Therefore, Bigfoot Forestry provides an Adjusted EBITDA figure to account for the differences between company owned and franchise locations.

Therefore, a prospective franchisee should pay close attention to whether the financial data presented is from company-owned outlets, franchised outlets, or a combination of both, and understand the implications of these differences when evaluating the potential financial performance of their own franchise.