What is the relationship between the financial performance of Crown Gold Exchange affiliate-owned businesses and potential franchisee performance?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
| Location | Sales |
|---|---|
| Riverside, CA | $2,797,519.00 |
| Estimated Royalty Fee | $12,000 |
| Chino, CA | $2,851,632.00 |
| Estimated Royalty Fee | $12,000 |
| Redlands, CA | $2,969,156.00 |
| Estimated Royalty Fee | $12,000 |
| Rancho Santa Margarita, CA | $5,000,771 |
| Estimated Royalty Fee | $12,000 |
| Hemet, CA | $2,794,677 |
| Estimated Royalty Fee | $12,000 |
| Palm Desert, CA | $2,817,185 |
| Estimated Royalty Fee | $12,000 |
| Ontario, CA | $2,334,860 |
| Estimated Royalty Fee | $12,000 |
The following chart contains selected financial performance information for seven Crown Gold businesses owned by our affiliate, WAM Gold, LLC that were open for this time period. These locations are all in California.
These Company Owned Outlets do not differ materially in any way from the future Franchise Owned Outlets.
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- Some outlets have sold and earned this amount. Your individual results may differ. There is no assurance that you'll sell or earn as much.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 33–35)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, Item 19 provides historical financial performance representations based on seven affiliate-owned businesses in California for the period of January 1, 2023, to December 31, 2023. These locations include Riverside, Chino, Redlands, Ontario, Hemet, Palm Desert, and Rancho Santa Margarita, and they opened between October 2010 and March 2013. The FDD indicates that these company-owned outlets do not differ materially from future franchise-owned outlets.
The financial data includes gross sales per location. For example, Riverside, CA, had gross sales of $2,797,519.00, while Rancho Santa Margarita, CA, had gross sales of $5,000,771. The lowest gross sales were from Ontario, CA, with $2,334,860. The document also estimates a royalty fee of $12,000 per location. It is important to note that these figures do not include operating expenses such as cost of goods sold, labor, advertising, and rent, which a franchisee would need to consider to determine net income.
Crown Gold Exchange emphasizes that the provided data are historical and not projections of future performance. The FDD explicitly states that individual results may vary, and there is no assurance that a franchisee will achieve similar sales or earnings. The document also clarifies that the affiliates do not pay royalties or marketing fees, but the estimated royalty expenditure of $1,000 per month is shown for each affiliate. Prospective franchisees can request written substantiation of the data presented in Item 19.
The Crown Gold Exchange FDD also states that the franchisor does not make any representations about a franchisee's future financial performance, beyond what is included in Item 19. If a potential franchisee receives any financial performance information or projections outside of Item 19, they are advised to report it to the franchisor's management and the Federal Trade Commission.