What operating costs are NOT included in Item 19 for Desi District Company Owned Outlets?

According to Desi District's 2024 Franchise Disclosure Document, Item 19, which presents the financial performance of company-owned outlets, does not include any operating expenses. This means that the gross sales figures provided for locations like Desi District LLC, Premier Meat Bazaar 423 Inc, Desi District Plano, Premier Eldorado Inc, and Desi Eats LLC do not reflect the costs associated with running the business.

Specifically, the FDD states that operating costs such as rent, cost of goods sold, labor, insurance, advertising, and other expenses are not factored into the financial performance representations in Item 19. A prospective franchisee needs to consider these costs separately to determine the net income or profitability of a Desi District franchise.

The document emphasizes that to understand the net income potential, a franchisee must account for these operating costs independently. While the Item 19 data provides gross sales and estimated royalty fees, it is crucial for potential franchisees to conduct their own due diligence and financial analysis to estimate these missing operating costs and project their potential earnings accurately. This is a common practice in franchising, where franchisors often present revenue figures without including detailed expense breakdowns, placing the onus on the franchisee to develop a comprehensive financial model.