What is included in the definition of 'Total Operating Expenses' for Cream franchises?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Total Operating Expenses means the sum of annual Direct Labor, Occupancy, Supplies, Credit Card Fees, Partnership Fees, Repairs and Maintenance, and Other Costs.
Total Operating Expenses does not include the estimated cost of any owner-operator salary and/or distributions or other compensation.
It does not include any interest or financing costs, deduction for depreciation or amortization, and/or any income or other types of taxes.
Other costs does not include an imputed Technology Fee.
Other Costs also does not include any of our affiliates' costs for corporate level employees or other expenses that are not specifically attributable to a location.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 51–57)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Total Operating Expenses are defined as the sum of several specific annual costs. These include Direct Labor, Occupancy, Supplies, Credit Card Fees, Partnership Fees, Repairs and Maintenance, and Other Costs. Understanding what comprises these expenses is crucial for a prospective franchisee to accurately project their potential profitability.
Notably, the definition of Total Operating Expenses for Cream franchises excludes certain costs. It does not include the estimated cost of any owner-operator salary, distributions, or other compensation. Additionally, it excludes interest or financing costs, deductions for depreciation or amortization, and any income or other types of taxes. An imputed Technology Fee is also excluded from Other Costs, as are any of Cream's affiliates' costs for corporate-level employees or other expenses not specifically attributable to a location.
By understanding exactly which expenses are included and excluded from the Total Operating Expenses calculation, a potential Cream franchisee can more accurately assess the financial performance representations provided in Item 19 of the FDD. This allows for a more informed decision regarding the potential profitability and overall financial viability of a Cream franchise.