What is the material financial and operational characteristic of affiliate-owned Byrider outlets that is reasonably anticipated to differ from future operational franchised outlets?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
mance at a particular location or under particular circumstances.
The financial information contained in the table below is based on historical performance representations about a subset of the franchise system's existing outlets based on the length of time the outlets have operated, and represents profits, expenses, and other statistics actually experienced by certain Byrider/CNAC businesses commonly called "Franchisee-Owned Stores," which are independently owned and operated. The material financial and operational characteristic of the "affiliate-owned" outlet that is reasonably anticipated to differ from future operational franchised outlets is the capital structure of the business.
The source of the data used in the financial information contained below is the franchise system's accounting software, which was assigned from Byrider Franchising to Byrider Franchising Partners in September 2024.
Data Set and Methodology
As of December 31, 2023, there were a total of 128 Byrider Businesses independently owned and operated by franchisees. However, 15 of those 128 Byrider Businesses were operated by franchisees that, as of September 2024, became affiliates of Byrider Franchising Partners ("Company-Owned Stores"). 92 of the remaining 113 Franchisee-Owned Stores operated during the entirety of 2022 and 2023 (referred to as the "Franchisee Complete Set"), and 8 of the 15 Company-Owned Stores also operated during the entirety of 2022 and 2023 (referred to as the "Company-Owned Complete Set, and together with the Franchisee Complete Set, the "Complete Set").
Source: Item 19 — Financial Performance Representations (FDD pages 63–81)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the primary financial and operational difference between affiliate-owned and franchised outlets lies in the capital structure of the business. This distinction is important for prospective franchisees to understand, as it suggests that the way affiliate-owned stores are financed and capitalized may differ significantly from how a franchisee would operate. This could impact various aspects of the business, including access to capital, debt levels, and overall financial risk.
Specifically, the FDD mentions that the financial information provided is based on historical performance data from both franchisee-owned and company-owned stores. As of December 31, 2023, there were 128 Byrider businesses independently owned and operated by franchisees. However, 15 of these became affiliates of Byrider Franchising Partners as of September 2024. The document uses data from 92 franchisee-owned stores and 8 company-owned stores that operated throughout 2022 and 2023 to compile its financial performance representations.
For a potential Byrider franchisee, this means that the financial benchmarks presented may not directly translate to their specific situation due to differences in capital structure. It is crucial to investigate how these structural differences could affect their store's profitability, cash flow, and long-term financial stability. Understanding the nuances of capital structure is essential for making informed decisions and accurately assessing the potential risks and rewards of investing in a Byrider franchise. Prospective franchisees should discuss these differences in detail with Byrider representatives and seek professional financial advice to fully grasp the implications.