Do Desi District affiliates pay royalties or marketing fees?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Our Affiliates do not pay royalties or marketing fees to us; however, we have shown the estimated expenditures (4% Royalty) for each Affiliate had they incurred those expenses.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–49)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, affiliates are not required to pay royalties or marketing fees. However, Item 19 includes estimated royalty fees, calculated as 4% of gross sales, for company-owned locations to provide prospective franchisees with an understanding of what these costs would be if they were incurred.
The document provides financial performance representations for several company-owned locations, including Desi District LLC, Premier Meat Bazaar 423 Inc, Desi District Plano, Premier Eldorado Inc, and Desi Eats LLC. These representations include the gross sales for each location and the estimated royalty fees based on the 4% calculation. For example, Desi District LLC had gross sales of $7,526,994.07 with estimated royalty fees of $301,079.76, while Desi District Plano had gross sales of $545,663.83 with estimated royalty fees of $21,826.55.
It is important to note that these are historical financial performance representations and not projections of future performance. The FDD explicitly states that there is no assurance that a franchisee will achieve similar sales or earnings. Furthermore, the financial data does not include operating expenses, such as rent, cost of goods sold, labor, insurance, and advertising, which would need to be considered to determine net income. Prospective franchisees should request written substantiation of the information in Item 19 and carefully consider all factors before making a decision.