factual

Does Item 19 include operating expenses for Desi District company-owned outlets?

Q: Does Item 19 include operating expenses for Desi District company-owned outlets?

- 3. This Item 19 does not include any operating expenses for operating the Company Owned Outlets. You would need to account for these costs in order to understand Net Income. Operating Costs would include rent, cost of goods sold, labor, insurance, advertising and other expenses. - 4. 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. - **5. 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 48–49)

Desi_District Franchise · 2024 FDD

Answer from 2024 FDD Document

1. This Item 19 does not include any operating expenses for operating the Company Owned Outlets. You would need to account for these costs in order to understand Net Income. Operating Costs would include rent, cost of goods sold, labor, insurance, advertising and other expenses.
1. 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.
5. 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 48–49)

What This Means (2024 FDD)

According to Desi District's 2024 Franchise Disclosure Document, Item 19 provides financial performance representations based on the company-owned outlets' gross sales between January 1, 2023, and December 31, 2023. However, it's crucial to note that Item 19 does not include any operating expenses for these company-owned outlets.

This means that the gross sales figures presented for locations like Desi District LLC with $7,526,994.07 in gross sales, Premier Meat Bazaar 423 Inc with $2,050,736.60, Desi District Plano with $545,663.83, Premier Eldorado Inc with $6,851,280.85, and Desi Eats LLC with $2,567,600.44, do not reflect the costs associated with running the business. A prospective franchisee would need to account for operating costs such as rent, cost of goods sold, labor, insurance, and advertising to understand the net income potential of a Desi District franchise.

The FDD includes estimated royalty fees for each affiliate, calculated as 4% of gross sales, even though affiliates do not actually pay these fees. For example, Desi District LLC has estimated royalty fees of $301,079.76, while Premier Meat Bazaar 423 Inc has estimated royalty fees of $82,029.46. These figures are provided to give franchisees an idea of what their royalty obligations would be.

Desi District emphasizes that the financial data presented are historical and not projections of future performance. The FDD also states that individual results may vary, and there is no assurance that a franchisee will achieve the same sales or earnings as the company-owned outlets. Prospective franchisees are encouraged to request written substantiation of the information in Item 19 and should report any additional financial performance information received to the franchisor's management, the Federal Trade Commission, and appropriate state regulatory agencies.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

All Desi_District 2024 FAQs Ask FDD Ninja