Does the financial performance representation for Chocolate Fish Coffee reflect other costs or expenses?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the financial performance representation provided does not reflect all the costs associated with operating a franchise. The Item 19 notes explicitly state that the gross sales figures do not account for costs of sales, operating expenses, or other costs that would be deducted to determine net income or profit.

This means that while the document presents gross sales figures, along with estimated royalty fees and brand fund contributions, a prospective Chocolate Fish Coffee franchisee must conduct their own independent investigation to determine what their actual costs and expenses will be. The FDD suggests that potential franchisees consult current or former franchisees, listed in Item 20, to gather more information about these costs.

The financial performance representations are based on data from three company-owned locations between September 1, 2022, and September 30, 2023. The document emphasizes that these are historical figures and not projections of future performance, and individual results may vary. The FDD also clarifies that the affiliates do not pay royalties or marketing fees, but the document shows estimated expenditures for royalty fees (6%) and brand fund (1%) for each affiliate had they incurred those expenses.

In summary, the financial performance data in Item 19 of Chocolate Fish Coffee's FDD provides gross sales information and hypothetical royalty/brand fund fees, but it is crucial for potential franchisees to recognize that this is not a complete financial picture. They must independently research all other operating costs to estimate their potential net income or profit accurately. The FDD directs prospective franchisees to current and former franchisees for further information.