What was the average net income from operations (before taxes) for Byrider stores in the fourth quartile?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
| | | |
| | | | | | | | | | | 3,287 | | | 3,339 | Net Income per Vehicle Sold 10 | 1,887 | | 2,039 | |
| Third Quartile = 25 Stores | Third Quartile Average | % Met or Exceed Avg | Third Quartile Median | Fourth Quartile = 25 Stores | Fourth Quartile Average | % Met or Exceed Avg | Fourth Quartile Median | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Annual Vehicle Sales6 | 284 | 259 | Annual Vehicle Sales6 | 221 | 219 | ||||||
| Sales Revenue2,11 | 4,720,736 | 72.57% | 36.00% | 4,382,794 | 73.15% | Sales Revenue2,11 | 3,790,894 | 74.49% | 52.00% | 3,791,281 | 73.96% |
| Finance Revenue3,11 | 1,784,025 | 27.43% | 48.00% | 1,679,517 | 28.03% | Finance Revenue3,11 | 1,298,466 | 25.51% | 44.00% | 1,173,473 | 22.89% |
| Total Revenue4,11 | 6,504,761 | 100.00% | 36.00% | 5,991,712 | 100.00% | Total Revenue4,11 | 5,089,360 100.00% | 56.00% | 5,126,113 100.00% | ||
| Cost of Goods Sold5 | 4,223,671 | 64.93% | 36.00% | 3,854,428 | 64.33% | Cost of Goods Sold5 | 3,421,585 | 67.23% | 48.00% | 3,398,496 | 66.30% |
| Total Gross Profit7 | 2,281,090 | 35.07% | 36.00% | 2,095,379 | 34.97% | Total Gross Profit7 | 1,667,776 | 32.77% | 44.00% | 1,553,104 | 30.30% |
| Total Operating Expense8 | 2,005,546 | 30.83% | 32.00% | 1,800,793 | 30.05% | Total Operating Expense8 | 1,911,733 | 37.56% | 44.00% | 1,897,279 | 37.01% |
| *Net Income from Operations (before taxes)9 | 275,545 | 4.24% | 60.00% | 292,236 | 4.88% | *Net Income from Operations (before taxes)9 | -243,958 | -4.79% | 56.00% | -176,270 | -3.44% |
| Net Income per Vehicle Sold 10 | 971 | 1,131 | Net Income per Vehicle Sold 10 | -1,105 | -807 |
| Third Quartile Average | % Met or | Third Quartile Median | Fourth Quartile Average | % Met or | Fourth Quartile Median | ||
|---|---|---|---|---|---|---|---|
| 284 | 259 | 221 | 219 | ||||
| 971 | 1,131 | Net Income per Vehicle Sold 10 | -1,105 | -807 |
*Does not include revenue or expenses from related warranty reinsurance and real estate holding companies
Notes
Note 1 – All reported numbers were rounded to the nearest whole number, and, therefore, products and quotients of the numbers listed in the information table may reflect marginal rounding differences.
Note 2 – "Sales Revenue" means all revenue derived from the sale of vehicles and does not include Finance Revenue as that term is defined below. It also includes documentation fees that may accompany the sale of a vehicle. Sales Revenue as used in this Item 19 is calculated the same as Gross Sales (Byrider Vehicle Sales) as defined in the Franchise Agreement, except that Sales Revenue includes revenue from the sale of wholesaled vehicles, which are vehicles sold for resale and for which no sales tax is required, and Gross Sales (Byrider Vehicle Sales) under the Franchise Agreement does not.
Note 3 –The sale of a vehicle results in a retail installment contract with principal balance bearing interest due from each customer. "Finance Revenue" means the interest income received from customers in connection with retail installment contracts and collateral protection insurance. Finance Revenue as used in this Item 19 is calculated the same as Gross Receipts (CNAC Collections) as defined in the Franchise Agreement, except that Gross Receipts (CNAC Collections) under the Franchise Agreement and Finance Revenue does not.
Note 4 – "Total Revenue" means Sales Revenue plus Finance Revenue.
Note 5 – "Cost of Goods Sold" means the cost of automobiles sold, vehicle service contract claims, warranty reserve, and interest expense on debt associated with receivables financing.
Note 6 – Annual Vehicle Sales equals retail installment contracts generated at Byrider Businesses generally considered in the marketplace to be "sub prime" credit quality with a value less than the full contract amount.
Note 7 – "Total Gross Profit" is calculated by subtracting Cost of Goods Sold from Total Revenue.
Source: Item 19 — Financial Performance Representations (FDD pages 63–81)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the average net income from operations (before taxes) for stores in the fourth quartile is presented in Item 19. For the group of 25 stores in the fourth quartile, the average net income from operations before taxes was reported as -$243,958, representing -4.79% of revenue. However, for a smaller group of 2 stores in the fourth quartile, the average net income from operations before taxes was $200,344, which is 3.32% of total revenue.
It's important to note that the financial performance can vary significantly between different quartiles. The fourth quartile, in this case, shows a negative average net income for the larger group of stores, indicating that, on average, these stores experienced a loss before taxes. This is in contrast to the smaller group of stores, which showed a positive net income. This disparity highlights the potential risks and variability in the Byrider franchise system.
A prospective franchisee should carefully consider these figures and investigate the factors that contribute to the differences in performance between stores in different quartiles. Understanding the reasons behind the negative net income in the fourth quartile for the larger group is crucial for making an informed investment decision. Factors such as location, management practices, local market conditions, and operational efficiency can all play a significant role in a store's financial success.
It is also worth noting that the FDD provides additional financial metrics, such as sales revenue, finance revenue, cost of goods sold, and operating expenses, which can offer further insights into the financial performance of Byrider stores. Reviewing these metrics in conjunction with the net income figures can provide a more comprehensive understanding of the franchise's financial dynamics.