Are there any material and/or operational characteristics of the company-owned Desi District outlets that are reasonably anticipated to differ materially from future operational franchise outlets?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
arket | | Estimated Royalty Fees | $102,704.02 | |
Notes:
-
- The foregoing data are historic financial performance representations. They are not projections of future performance. There are no other material and/or operational characteristics of the company-owned outlets that are reasonably anticipated to differ materially from future operational franchise outlets.
-
- "Gross Sales" means the total revenue derived from the sale of goods or services less sales tax, discounts, and returns. Each of the Company Owned businesses is labeled as to which of the types of franchise models these are. The type of franchise business model will have an impact on the total Gross Sales potential for your business.
-
- 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.
-
- 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.
-
- Written substantiation of the information contained in this Item 19 will be made available to prospective franchisees upon reasonable request.
Except for what is included in this Item 19, we do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 48–49)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, there are no material or operational differences expected between company-owned and future franchised outlets. The FDD provides financial performance representations based on company-owned outlets from January 1, 2023, through December 31, 2023. These locations are owned by affiliate entities. The document emphasizes that the financial data presented are historical and not projections of future performance.
The financial performance data includes gross sales for various company-owned locations, such as Desi District LLC with gross sales of $7,526,994.07, 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. The FDD also includes estimated royalty fees for each location, calculated as 4% of gross sales. For example, the estimated royalty fees for Desi District LLC are $301,079.76.
It is important to note that the Item 19 data does not include operating expenses, such as rent, cost of goods sold, labor, insurance, and advertising. A prospective franchisee would need to account for these costs to understand potential net income. 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. While affiliates do not pay royalties or marketing fees, the FDD includes estimated expenditures for these fees to provide a more accurate representation of potential costs for franchisees.