What was the net income before taxes for Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
OF OPERATIONS AND RETAINED EARNINGS YEARS ENDED DECEMBER 31, 2022
| Franchise fees | $ 31,209 | 13.3 % |
|---|---|---|
| Royalty fees | 183,518 | 78.2 |
| Other income | 19,976 | 8.5 |
| TOTAL REVENUES | 234,703 | 100.0 |
| OPERATING EXPENSES | ||
| Advertising | 7,633 | 3.3 |
| Amorization | 1,458 | 0.6 |
| Legal and accounting | 8,450 | 3.6 |
| Management fees | 69,600 | 29.7 |
| Meals and entertainment | 3,241 | 1.4 |
| Office expense | 807 | 0.3 |
| Travel | 901 | 0.4 |
| TOTAL OPERATING EXPENSES | 92,090 | 39.2 |
| NET INCOME FROM OPERATIONS BEFORE TAXES | 142,613 | 60.8 |
| OTHER INCOME (EXPENSE) | ||
| Interest expense | (174) | (0.1) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries' 2024 Franchise Disclosure Document, the net income before taxes for the company was $142,439, representing 60.7% of total revenues. This figure is derived after accounting for total revenues of $234,703, which includes franchise fees, royalty fees, and other income. Operating expenses totaled $92,090, encompassing costs such as advertising, amortization, legal and accounting fees, management fees, meals and entertainment, office expenses, and travel. Additionally, the company incurred an interest expense of $174, which slightly reduced the net income from operations before taxes of $142,613 to the final net income before taxes.
For a prospective Burros Fries franchisee, understanding the franchisor's financial performance is crucial. A net income before taxes of $142,439 suggests that the company is operating profitably. However, it's important to consider the various components contributing to this income, such as the revenue streams from franchise and royalty fees, as well as the impact of operating expenses. Franchisees should analyze these figures in relation to their own potential costs and revenues to assess the financial viability of their investment.
It is also important to note that these figures represent the franchisor's performance and may not be indicative of an individual franchisee's potential earnings. Factors such as location, operating efficiency, and local market conditions can significantly impact a franchisee's financial results. Therefore, while the franchisor's net income before taxes provides a general overview of the company's financial health, prospective franchisees should conduct their own due diligence and financial projections to determine the potential profitability of their specific franchise location.
Furthermore, the FDD includes financial statements audited by Prudhomme Associates CPAs for the years ending December 31, 2021, December 31, 2022, and December 31, 2023, along with unaudited financials up to October 31, 2024. Reviewing these statements can provide a more comprehensive understanding of Burros Fries' financial history and trends, aiding potential franchisees in making informed decisions.