How is 'Gross Profit' calculated for a Buona restaurant, according to the FDD?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
ates consistent with generally accepted accounting principles. The same accounting system is used for each restaurant. The information has not been audited.
Definitionsfor Single Brand. The terms used in the tables below for the Single Brand Buona Businesses (both Free Standing and Inline) are defined for purposes of this Item 19 statement of financial performance representation as follows:
- (1) "BUONA Restaurant Sales" are defined as the portion of total revenue received f
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–75)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Gross Profit is calculated by subtracting Food Cost and Packaging Cost from Gross Sales. This definition applies to both single-brand Buona restaurants (both free-standing and inline) and dual-brand restaurants that combine Buona with Rainbow Cone. Food Cost includes the costs of food and beverage items, while Packaging Cost includes expenses for paper and plastic products.
For a prospective franchisee, understanding this calculation is crucial for assessing the potential profitability of a Buona franchise. Gross Profit represents the revenue remaining after deducting the direct costs of goods sold (food and packaging). It provides a clear picture of how efficiently a Buona restaurant manages its primary expenses related to producing and packaging its menu items.
It's important to note that Gross Profit does not account for other significant operating expenses such as salaries, employee benefits, utilities, rent, or marketing costs. These additional expenses must be factored in to determine the net profit or actual income of the business. The FDD emphasizes that net profits can vary significantly based on factors like management experience, location, competition, and economic conditions. Therefore, while Gross Profit offers a valuable insight into the core profitability of a Buona restaurant, a comprehensive financial analysis is necessary to evaluate the overall investment potential.
As an example, the FDD provides financial performance data for several Buona Drive-Thru stores. For Store 1, Total Gross Sales were $3,625,702, Food Cost was $1,081,603, and Packaging Cost was $110,692, resulting in a Gross Profit of $2,433,407. This represents 67.1% of total gross sales. Similar data is presented for other stores, allowing prospective franchisees to compare the Gross Profit margins of different locations and assess the factors that may influence their own potential profitability.