What were the direct operating expenses for Coffee News in the first fiscal year presented?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
Advertising costs of $41,044, $29,523, and $38,230 for years ended 2024, 2023 and 2022 are charged to expense as they are incurred.
The Company had a six-year office lease with an unrelated party for $2,125 per month. Total lease expense for the office was $14,875 in 2022. The lease was terminated in July 2022 and was not renewed.
Equipment lease expense totaled $1,614 in 2024, $1,749 in 2023 and $1,880 in 2022.
Management fees to the sole stockholder are paid for supervising Company operations. Fees totaled $89,483 in 2024 and $0 in 2023.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
Based on the 2025 Coffee News Franchise Disclosure Document, the financial statements provided cover the fiscal years 2022, 2023, and 2024. The FDD mentions advertising costs as an expense, specifying that these costs were $38,230 in 2022, $29,523 in 2023, and $41,044 in 2024. Additionally, the company's office lease expenses totaled $14,875 in 2022, while equipment lease expenses were $1,880 in 2022, $1,749 in 2023 and $1,614 in 2024. Management fees to the sole stockholder totaled $89,483 in 2024 and $0 in 2023.
For a prospective Coffee News franchisee, understanding these operating expenses is crucial for financial planning. Advertising costs, office and equipment leases, and management fees represent significant expenditures that can impact profitability. Note that these figures reflect the franchisor's expenses and may not directly translate to the costs a franchisee will incur. Franchisees should develop their own projections based on their specific market and operational scale.
It is important to note that the FDD does not provide a comprehensive list of all potential operating expenses. A prospective franchisee should inquire about other potential costs such as printing, online services, and any other fees associated with running the franchise. Understanding the full scope of potential expenses is essential for making an informed investment decision.