How is the financial information for Cream's Item 19 Shops divided?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The information for the Item 19 Shops is divided into quartiles based on annual Net Profit (defined below) for the 2024 calendar year.
Net Sales is calculated in the same manner as Net Sales under the Franchise Agreement, and includes all revenue derived from operating the Item 19 Shops, whether from cash, check, vouchers, tickets, or other comparable forms of payment, credit and debit card, barter exchange, trade credit, or other credit transactions, net of authorized discounts (i.e., employee discounts, free birthday scoops, and good neighbor discounts and loyalty rewards).
COGS means the landed cost of ice cream products and other food, merchandise, beverage products, and ingredients.
Gross Profit means annual Net Sales less annual COGS and is expressed as a dollar amount and as a percentage of annual Net Sales.
Direct Labor means the cost of wages and other compensation paid to Shop employees together with payroll taxes and employee benefits, but excluding payroll admin costs.
Occupancy means the cost of rent, utilities, property insurance, and common area maintenance for the real property.
Supplies means the cost of paper goods and related packaging and other supplies, such as cleaning and office supplies.
Credit Card Fees means the amounts paid to credit card processors for customer transactions.
Partnership Fees means the cost of fees and costs paid to delivery and marketplace platforms.
Total Operating Expenses does not include the estimated cost of any owner-operator salary and/or distributions or other compensation.
Imputed Royalty and Brand Fund Contributions is calculated as 7% of average annual Net Sales, based on the 5% Royalty Fee and 2% Brand Fund Contribution that a franchisee would be required to pay us.
Net Profit means annual Gross Profit, less Total Operating Expenses and Royalty and Brand Fund Contributions and is expressed as a dollar amount and as a percentage of Gross Profit.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 51–57)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the financial performance data in Item 19 is divided into quartiles based on the annual Net Profit of 83 corporate-owned Jeni's Ice Creams Scoop Shops that operated for the entirety of the 2024 calendar year. These shops are referred to as "Item 19 Shops." Cream had no franchised outlets operating as of the end of their most recent fiscal year, so the financial performance representation is based solely on corporate-owned shops.
The Item 19 data includes several key financial metrics, each broken down by quartile (top 25%, upper mid 25%, lower mid 25%, and bottom 25%), as well as an overall median across all shops. These metrics include Net Sales, which is all revenue derived from operating the shops, net of authorized discounts, but excluding sales taxes and tips. Cost of Goods Sold (COGS) is the landed cost of ice cream products, food, merchandise, beverage products, and ingredients. Gross Profit is annual Net Sales less annual COGS. Direct Labor includes wages, compensation, payroll taxes, and benefits for shop employees, including one Shopkeeper per location, but excludes corporate employee compensation.
Additional financial metrics presented by quartile include Occupancy costs (rent, utilities, property insurance, and common area maintenance), Supplies (paper goods, packaging, cleaning, and office supplies), Credit Card Fees, Partnership Fees (fees paid to delivery and marketplace platforms), Total Operating Expenses, Imputed Royalty and Brand Fund Contributions (calculated as 7% of average annual Net Sales), and Net Profit (annual Gross Profit, less Total Operating Expenses and Royalty and Brand Fund Contributions). Total Operating Expenses do not include the estimated cost of any owner-operator salary. Net Profit does not include any interest or financing costs, deduction for depreciation or amortization, and/or any income or other types of taxes. Other Costs also do not include any of our affiliates' costs for corporate level employees or other expenses that are not specifically attributable.
Prospective franchisees should note that the financial performance representation is based on corporate-owned shops and that individual results may vary. Cream emphasizes that there is no assurance that a franchisee will earn as much as the figures presented. Cream will provide written substantiation for the financial performance representation upon reasonable request. Franchisees are advised to report any unauthorized financial performance information or projections to Cream's management, the Federal Trade Commission, and appropriate state regulatory agencies.