What was the amount spent on advertising by Craters & Freighters for the year ended December 31, 2022?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Years Ended December 31, | Amount | % | Amount | % | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Franchise Revenues | $ | 1,791,736 | 30.1 % $ | 2,101,299 | 32.2 9 | |
| Royalty Revenues, net of Royalty Rebates | Ţ | 4,048,135 | 68.2 | 4,232,547 | 66.4 | |
| Initial Franchise Fee and Transfer Fee Revenue | 98,255 | 1.7 | 39,000 | 1.4 | ||
| Total Revenues | 5,938,126 | 100.0 | 6,372,846 | 100.0 | ||
| Costs of Revenues | ||||||
| Franchise Support | 2,036,715 | 1,519,545 | ||||
| Advertising | 957,288 | 951,719 | ||||
| Insurance Program | 733,842 | 737,736 | ||||
| Technology Support | 95,025 | 59,866 | ||||
| Total Costs of Revenues | 3,822,870 | 64.4 % | 3,268,866 | 51.2 % | ||
| Gross Profit | 2,115,256 | 35.6 % | 3,103,980 | 48.8 % | ||
| General and Administrative Expenses | ||||||
| Depreciation and Amortization | 158,990 | 128,123 | ||||
| Credit Losses (Recovery) | (30,000) | 10,000 | ||||
| Bank Charges | 11,002 | 5,271 | ||||
| Donations | 57,300 | 57,863 | ||||
| Dues and Subscriptions | 5,273 | 1,553 | ||||
| Employee Benefits | 12,158 | 12,081 | ||||
| Equipment | 31,246 | 42,542 | ||||
| Insurance | 75,629 | 75,156 | ||||
| Legal and Professional Fees | 328,824 | 216,207 | ||||
| Office Supplies | 30,584 | 104,945 | ||||
| Rent | 81,856 | 94,143 | ||||
| Repairs and Maintenance | 164,272 | 11,668 | ||||
| IT and Software | 121,168 | 52,324 | ||||
| Taxes and Licenses | 1,978 | 1,978 | ||||
| Telephone and Utilities | 45,458 | 63,012 | ||||
| Travel and Entertainment | 67,796 | 25,568 | ||||
| Total General and | 0 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the company spent $951,719 on advertising for the year ended December 31, 2022. This figure is part of the costs of revenues, which also include franchise support, insurance program, and technology support. The advertising expenditure represents a portion of the total costs of revenues, which amounted to $3,268,866 for that year.
For a prospective Craters & Freighters franchisee, understanding the franchisor's advertising spend is crucial. It provides insight into the level of support the franchisee can expect in terms of brand promotion and customer acquisition. A significant investment in advertising by the franchisor can help drive business to individual franchise locations.
However, franchisees should also investigate how these advertising funds are allocated. It is important to determine what portion is spent on national campaigns versus local advertising efforts that directly benefit individual franchisees. Additionally, franchisees should inquire about the effectiveness of these advertising campaigns and the metrics used to measure their success. Understanding the return on investment for advertising expenditures can help franchisees assess the value they receive from these contributions.
It's also worth noting that the advertising expenditure for 2023 was $957,288, slightly higher than the 2022 amount. This indicates a consistent commitment to advertising, but franchisees should still verify the advertising strategies and their impact on franchise performance.