What were the total operating expenses for Crab N Spice in 2023?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
BER 31, 2022 & DECEMBER 31, 2021 PROFIT & LOSS STATEMENT CRAB N SPICE GROUP
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Revenue | |||
| Franchise Fee Revenue | $ 39,032 | $ 130,841 | $ 90,000 |
| Royalty | 66,981 | 35,309 | - |
| Services & Products | 16,319 | 46,565 | 28,240 |
| Total Revenue | 122,332 | 212,715 | 118,240 |
| Cost of Sales | 16,100 | 36,214 | 34,028 |
| Gross Profit | 106,232 | 176,501 | 84,212 |
| Operating Expense | |||
| Salaries & Wages Expense | 17,880 | - | - |
| Legal & Professional Fees | 18,484 | 91,040 | 33,013 |
| Travel Expense | 11,257 | 20,795 | 11,110 |
| Office Expense | 12,350 | 16,155 | 11,063 |
| Supplies & Materials Expense | 20,532 | 10,960 | 10,986 |
| Advertising & Marketing Expense | 53,460 | 42,058 | 5,398 |
| Total Operating Expenses | 133,963 | 181,008 | 71,570 |
| Net Income From Operations | (27,731) | (4,507) 12,642 | |
| Other Income (Expense) | |||
| Total Other Income (Expense) | - | - | - |
| Net Income Before Provision for Income Tax | (27,731) | (4,507) 12,642 | |
| Provision for Income T |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 40–50)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, the total operating expenses for the company in 2023 were $133,963. This figure is derived from the company's audited financial statements, which include various expense categories such as salaries and wages, legal and professional fees, travel, office expenses, supplies and materials, and advertising and marketing. These expenses are essential for the franchisor to manage its operations, support franchisees, and market the Crab N Spice brand.
Breaking down the operating expenses, the most significant categories for Crab N Spice in 2023 were advertising and marketing expenses at $53,460, followed by supplies and materials at $20,532, and legal and professional fees at $18,484. Salaries and wages amounted to $17,880, while office expenses were $12,350 and travel expenses were $11,257. These figures provide insight into where Crab N Spice allocates its resources to support its franchise system.
For a prospective franchisee, understanding these operating expenses is crucial as it reflects the franchisor's investment in the brand and its support systems. High advertising and marketing expenses, for example, could indicate a strong focus on brand awareness and customer acquisition, which could benefit franchisees. Similarly, significant legal and professional fees might suggest that Crab N Spice is diligent in protecting its trademarks and ensuring compliance. Franchisees should consider these expenses in the context of the overall financial health and growth strategy of Crab N Spice.
It is also worth noting that the net income from operations for Crab N Spice in 2023 was a loss of $27,731. This loss is after deducting the total operating expenses from the gross profit. While a loss might raise concerns, it is essential to evaluate the reasons behind it, such as investments in expansion or one-time expenses. Prospective franchisees should further investigate the franchisor's financial performance and future projections to assess the long-term viability of the franchise opportunity.