What is the reasonable basis for Cilantro Taco Grill's inclusion of the Financial Performance Representation?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
s. Your individual results may differ. There is no assurance you will earn as much.**
The reasonable basis for inclusion of this Financial Performance Representation is the affiliate-owned outlet are similar to the franchise being offered under this Disclosure Document in terms of operations and product offerings. There are no material financial or operational characteristics of the below affiliate-owned outlets that are reasonably anticipated to differ materially from future franchise outlet operations. The affiliate-owned outlets are different from the franchise being offered in that they do not pay any Royalty Fees or Worldwide Creative Marketing Fees to us or expend any minimum amount on local advertising and are not subject to territorial advertising or service restrictions.
Written substantiation for the financial performance representation will be made available to the prospective franchisee upon reasonable request.
Other than the preceding financial performance representation, CTG Franchise LLC does not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to our management by contacting Cuahutémoc Morfin at 80 West Lake Street, Northlake, Illinois 60164 or 708-223-0422, the Federal Trade Commission, and the appropriate state regulatory agencies.
ITEM 20: OUTLETS AND FRANCHISEE INFORMATION
Table No.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–49)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the reasonable basis for the financial performance representation is that the affiliate-owned outlets are similar to the franchise being offered in terms of operations and product offerings. The FDD states that there are 13 affiliate-owned Cilantro Taco Grill outlets that have been open and operating for at least 12 months, and the financial representations provided are for the fiscal year ending December 31, 2023.
The document indicates that there are no material financial or operational characteristics of the affiliate-owned outlets that are reasonably anticipated to differ materially from future franchise outlet operations. However, the affiliate-owned outlets differ from franchised outlets because they do not pay any Royalty Fees or Worldwide Creative Marketing Fees to Cilantro Taco Grill, nor do they expend any minimum amount on local advertising. Additionally, the affiliate-owned locations are not subject to territorial advertising or service restrictions.
The average gross sales for these affiliate-owned locations was $1,441,657.51, calculated as total sales minus sales tax and customer refunds. The average square footage of these locations is 1330.461538, resulting in average sales per square foot of $1,083.58. It is important to note that 5 of the 13 outlets (38%) exceeded the average gross sales, and the median outlet had 2023 gross sales equal to $1,068,975.94. The FDD emphasizes that individual results may differ and there is no assurance that a franchisee will earn as much.