What was the gross profit for Browns Chicken in 2023?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
|
| BALANCE, END OF YEAR | $ 87,136 | $ 63,236 |
BROWN'S CHICKEN, LLC CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |||
|---|---|---|---|---|
| % Amount | Amount | % | ||
| REVENUE: | ||||
| Royalties | $ 403,743 | 52.54 | $ 399,453 | 50.60 |
| Initial Franchise Fees | 1,200 | 0.16 | - | - |
| Advertising | 357,273 | 46.50 | 377,481 | 47.82 |
| Vendor Promo Allowance | 6,150 | 0.80 | 12,454 | 1.58 |
| Total Revenue | 768,366 | 100.00 | 789,388 | 100.00 |
| DIRECT EXPENSES: | ||||
| Advertising and Promotions | 165,302 | 21.51 | 155,293 | 19.67 |
| Employee Benefits | 510 | 0.07 | - | - |
| Franchising Expenses | 13,499 | 1.76 | 10,302 | 1.31 |
| Payroll Taxes | 15,721 | 2.05 | 14,164 | 1.79 |
| Salaries | 193,807 | 25.22 | 173,789 | 22.02 |
| Total Direct Expenses | 388,839 | 50.61 | 353,548 | 44.79 |
| Gross Profit | 379,527 | 49.39 | 435,840 | 55.21 |
| SELLING, GENERAL, AND | ||||
| ADMINISTRATIVE EXPENSES | 287,223 | 37.38 | 296,705 | 37.59 |
| NET EARNINGS FOR THE YEAR | 92,304 | 12.01 | 139,135 | 17.62 |
| NON-CONTROLLING INTEREST | 23,900 | 3.11 | 4 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the gross profit for the company in 2023 was $379,527, representing 49.39% of total revenue. This figure is derived from the consolidated statements of operations for the years ending December 31, 2023, and 2022. Gross profit is calculated by subtracting total direct expenses from total revenue.
For a prospective Browns Chicken franchisee, understanding the gross profit is crucial as it indicates the profitability of the company's core business activities before considering administrative and other overhead expenses. A higher gross profit margin suggests that Browns Chicken is efficient in managing its direct costs, such as advertising and promotions, employee benefits, franchising expenses, payroll taxes, and salaries.
In 2023, Browns Chicken's total revenue was $768,366, with direct expenses amounting to $388,839. This resulted in the gross profit of $379,527. When evaluating the financial health of Browns Chicken, potential franchisees should also consider the selling, general, and administrative expenses, which totaled $287,223 in 2023. The net earnings for the year were $92,304. These figures provide a more complete picture of the company's overall profitability and should be analyzed in conjunction with other financial metrics to assess the franchise's viability.
It's also worth noting that the gross profit in 2022 was $435,840, which was higher than in 2023. This decrease in gross profit should prompt further investigation into the factors contributing to the change, such as increased direct expenses or decreased revenue. Prospective franchisees should discuss these trends with Browns Chicken to gain a better understanding of the company's financial performance and future prospects.