How does Christian Brothers Automotive define 'Cost of Goods Sold (COGS)' in Schedule 19.2?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
Schedule 19.2 provides results for the included CBA stores by age of the business in 6 distinct categories: Net Sales, Cost of Goods Sold (COGS), Gross Profit (GP), General & Administrative Expenses (G&A), Net Operating Income (NOI) and Total Owner Benefit (TOB) for the year ending December 31, 2024.
Net Sales is defined as all gross revenue derived from labor, parts and sub-contracted labor/parts and supplies, less labor/parts discounts.
Cost of Goods Sold (COGS) is defined as all technician labor, parts costs and all sub-contracted labor/parts associated with Net Sales.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 62–69)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, Schedule 19.2 provides financial performance results for CBA stores, categorized by the age of the business. One of the key metrics presented is Cost of Goods Sold (COGS). For the year ending December 31, 2024, Christian Brothers Automotive defines COGS as the sum of all technician labor, parts costs, and all sub-contracted labor/parts associated with Net Sales.
This definition is crucial for prospective franchisees as it outlines exactly what expenses are included when calculating the cost of providing services. Understanding this definition allows franchisees to accurately assess their gross profit and overall financial performance. By knowing which costs are classified as COGS, franchisees can better manage their expenses and pricing strategies to maximize profitability.
For example, if a Christian Brothers Automotive franchisee subcontracts a specialized repair, the labor and parts costs associated with that subcontracted work would be included in the COGS calculation. Similarly, the wages paid to technicians and the cost of all parts used in repairs are also factored into COGS. This comprehensive definition ensures that all direct costs related to service delivery are accounted for, providing a clear picture of the business's financial health.