Does the Bombs Away financial performance representation reflect the costs of sales?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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1/01/2023 – 12/31/2023 Financial Results
The following chart contains the January 1st, 2023 to December 31st, 2023 financial performance information for the Bombs Away! business owned by our affiliate that was open for this time period. This location is in California.
Gross Sales: $419,423
Estimated Royalty Fees: $33,554 Estimated Marketing Fund: $8,389
Notes:
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- The foregoing information shows historical financial performance.
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- There was a total of one Bombs Away! business open for this time frame which is owned by our Affiliate.
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- "Gross Sales" means total of all collected revenue in a period, not including discounts, taxes, tips/gratuity or voids.
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- The financial performance representation does not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your Bombs Away business. Franchisees or former franchisees, listed in Item 20 of this Franchise Disclosure Document, may be one source of this information.
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- "Royalty/Marketing Fees" reflect the 8% royalty plus the 2% System Marketing Contribution that these outlets would have paid if they were franchised.
**Some outlets have sold these amounts. Your individual result
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 31–33)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the financial performance representation provided does not reflect the costs of sales. The financial performance information from January 1, 2023, to December 31, 2023, pertains to a Bombs Away business owned by an affiliate in California. The gross sales for this period were $419,423, with estimated royalty fees of $33,554 and an estimated marketing fund contribution of $8,389.
It is important to note that the financial performance representation only includes gross sales and estimated royalty/marketing fees. It explicitly excludes costs of sales, operating expenses, and other costs or expenses that would be necessary to calculate net income or profit. Bombs Away advises prospective franchisees to conduct their own independent investigation of these costs and expenses.
Prospective franchisees should be aware that the historical financial performance presented is from a single Bombs Away business owned by an affiliate and that individual results may vary. The FDD clearly states that there is no assurance that a franchisee will achieve similar sales figures. Therefore, it is crucial for potential franchisees to conduct thorough due diligence, including consulting with existing or former franchisees and seeking professional financial advice, to understand the potential costs and profitability of a Bombs Away franchise.