Does Buff City Soap directly operate the company-owned BCS Makeries?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
Notes:
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- We compiled and calculated the data for company-owned BCS Makeries using information supplied by our affiliate, Buff City Soap LLC. We do not directly operate the company-owned BCS Makeries, our affiliate, Buff City Soap LLC does. For franchised BCS Makeries, we have relied on figures provided to us by our franchisees for those outlets, and neither we nor any independent certified public accountant has independently audited or verified this information.
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- "Net Sales" is defined as the total selling price of all services and products and all income of every kind and nature related to each BCS Makery, whether for cash, cash equivalents, or credit, and regardless of collection in the case of credit. Proceeds from the sale of coupons, gift cards, gift certificates or vouchers is included in Net Sales when and at the Makery from which the coupons, gift cards, gift certificates or vouchers are eventually redeemed. Net Sales exclude the following: complimentary products and services (provided that the aggregate amount of such products and services does not exceed 2% of Net Sales for the applicable week), tips and gratuities, and sums collected and actually paid by a Makery for any sales or other excise tax imposed by any duly constituted government authority. In the case of promotional discounts implemented by us at the BCS Makery, the amount actually paid by the guest after the discount, rather than the original amount, will be considered for purposes of the term Net Sales. Net Sales also includes the proceeds of any business interruption insurance applicable to each BCS Makery.
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- Company-owned BCS Makeries do not pay a royalty. So, we have calculated an "Imputed Royalty" in Table 2 and Table 3 above based on Net Sales multiplied by our 6% royalty rate.
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- SLEBITDA is calculated before accounting for certain general and administrative expenses of our affiliate, Buff City Soap, LLC, which are not related to typical store-level operations.
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- Average, Median, High and Low data for company-owned BCS Makeries are calculated separately for each metropolitan area.
Source: Item 19 — Financial Performance Representations (FDD pages 59–63)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, Buff City Soap does not directly operate the company-owned BCS Makeries. Instead, its affiliate, Buff City Soap LLC, handles the operations of these company-owned locations. This distinction is important for prospective franchisees to understand, as the financial data presented for company-owned stores is compiled using information provided by the affiliate.
This arrangement means that while Buff City Soap offers the franchise opportunity, the actual operation of company-owned stores is managed by a separate entity. The FDD clarifies that the franchisor relies on figures provided by franchisees for franchised locations and has not independently audited or verified this information. For company-owned stores, the data is supplied by their affiliate, Buff City Soap LLC.
It's also worth noting that company-owned BCS Makeries do not pay a royalty fee, unlike franchised locations. To provide a comparable financial picture, Buff City Soap calculates an "Imputed Royalty" in the financial tables, based on a 6% royalty rate applied to Net Sales. This imputed royalty is factored into the financial performance representations for company-owned stores, allowing for a more accurate comparison between company-owned and franchised locations. Prospective franchisees should carefully review these imputed figures to understand the potential impact of royalty fees on their own store's profitability.
In summary, while Buff City Soap LLC operates the company-owned stores, Buff City Soap franchises the brand. Understanding this relationship is crucial for interpreting the financial performance data presented in the FDD and assessing the potential profitability of a Buff City Soap franchise.