What were the selling, general, and administrative expenses 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 | 46,1 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the selling, general, and administrative expenses for the company in 2023 were $287,223, representing 37.38% of total revenue. In comparison, these expenses were $296,705 in 2022, which was 37.59% of total revenue. This indicates a slight decrease in both the absolute amount and as a percentage of revenue from 2022 to 2023.
Selling, general, and administrative (SG&A) expenses typically include a variety of costs related to running the business, such as salaries for administrative staff, rent, utilities, marketing, and other overhead costs. For a prospective franchisee, understanding these expenses is crucial because they reflect the franchisor's operational efficiency and how well they manage their overhead. Lower SG&A expenses as a percentage of revenue could indicate better cost control, which might translate to a more financially stable franchisor.
However, it's also important to consider whether these expenses are appropriately allocated and sufficient to support the franchise system. For instance, if Browns Chicken has significantly cut back on administrative expenses, it could potentially impact the level of support and resources available to franchisees. Therefore, a prospective franchisee should investigate the specific components of these expenses to ensure that the franchisor is adequately investing in areas that benefit the franchisees, such as training, marketing, and technology.
Overall, while the decrease in SG&A expenses for Browns Chicken in 2023 might seem positive, a deeper analysis is needed to determine whether it reflects genuine efficiency improvements or potential underinvestment in critical support functions. Prospective franchisees should discuss these figures with the franchisor to gain a comprehensive understanding of how these expenses are managed and how they impact the franchise system.