How much in royalty fees would the Bigfoot Forestry Company-Owned Outlet have incurred as a franchisee?
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, the Company-Owned Outlet would have incurred $44,945 in royalty fees if it had been a franchised outlet during the measuring year. This figure is part of the Imputed Fees & Costs section of the financial performance representation, which calculates what the Company-Owned Outlet would have paid if it operated under a franchise agreement.
This imputation is based on a sliding royalty scale applied to gross sales, as detailed in Item 6 of the FDD. The purpose of including these imputed costs is to provide prospective franchisees with a clearer picture of the expenses they can expect to incur as franchisees, compared to the operational costs of a company-owned outlet which does not pay these fees. The document specifies that the Company-Owned Outlet did not actually pay any royalty fees during the measuring year.
It's important to note that the financial performance representation is based on the historical results of a single Company-Owned Outlet and that individual results may vary. The FDD explicitly states that there is no assurance that a franchisee will earn as much as the figures presented. Prospective franchisees should carefully consider all aspects of the financial performance representation and seek professional advice before making any investment decisions.