How are Imputed Fees and Costs accounted for in the Adjusted EBITDA calculation 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 calculated by subtracting Imputed Fees & Costs from EBITDA. Imputed Fees & Costs are designed to represent the expenses a franchised outlet would typically incur but are not necessarily incurred by the company-owned outlet. These include Brand Fund Fees, the difference between the Local Marketing Commitment and actual marketing expenses, Royalty Fees, and Technology fees. This adjustment provides a more realistic view of potential franchisee earnings by factoring in these standard franchise-related costs.
For the company-owned outlet, the 2024 financial performance representation includes specific details on how these imputed fees are calculated. For instance, the company-owned outlet did not pay brand fund fees or royalty fees. Therefore, in the Imputed Fees & Costs section of the EBITDA calculation, royalty fees of $44,945 and brand fund fees of $7,382 are included, representing what a franchisee would have incurred. Similarly, the company-owned outlet spent $15,697 on local advertising, exceeding the minimum local marketing commitment of $14,764 (the greater of $1,000 per month or 2% of Gross Sales). As a result, $0 is included for imputed marketing costs.
Regarding technology fees, the company-owned outlet incurred $5,447 in expenses for goods and services covered by the technology fee ($1,800 for tech support and $3,647 for Microsoft 365). Since this exceeded the total technology fees a franchised outlet would have incurred ($4,200 plus $504 for additional email accounts), no additional technology fees were imputed. In total, the Imputed Fees & Costs for the company-owned outlet amounted to $52,327, which was then subtracted from the EBITDA of $389,004 to arrive at an Adjusted EBITDA of $336,677. This Adjusted EBITDA offers a more accurate representation of the financial performance a franchisee might expect, considering standard franchise-related expenses.