What was the total revenue for 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, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the total revenue for the year ended December 31, 2022, was $6,372,846. This revenue is comprised of three categories: franchise revenues, royalty revenues (net of royalty rebates), and initial franchise and transfer fee revenue. Franchise revenues accounted for $2,101,299, royalty revenues were $4,232,547, and initial franchise and transfer fee revenue totaled $39,000. These figures represent the income Craters & Freighters generated from its franchising operations during that year.
For a prospective franchisee, understanding the revenue streams of the franchisor is crucial. It provides insight into how the franchisor generates income and the relative importance of different revenue sources. In this case, royalty revenues make up the majority (66.4%) of Craters & Freighters' total revenue, indicating that the company relies heavily on the ongoing performance of its franchisees. Franchise revenues make up 32.29% of the total revenue, while initial franchise and transfer fees only account for 1.4%.
These figures can help a potential franchisee assess the financial stability and growth potential of Craters & Freighters. A consistent and growing revenue stream suggests a healthy franchise system. However, it is also important to consider the costs associated with generating this revenue. The FDD also indicates that the total costs of revenues for the year ended December 31, 2022, were $3,268,866, resulting in a gross profit of $3,103,980. Analyzing both revenue and costs provides a more complete picture of the franchisor's financial performance.
It is important to note that these are the franchisor's revenues, not the revenues of individual franchise locations. A prospective franchisee should carefully review Item 19 in the FDD, which may provide information on franchisee performance, and speak with existing franchisees to understand their actual revenues and expenses. Additionally, the franchisee should consider how changes in the economy or industry could impact Craters & Freighters' revenue and, consequently, their own potential profitability.