What is the basis for the financial performance representation provided for Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
providing information about possible performance at a particular location or under particular circumstances.
The Financial Performance Representation in the Table below is a historic financial performance representation based on existing (traditional) Golden Krust Caribbean Bakery and Grill Restaurants. There are currently no Jerk N' Patties Restaurants operating so they have not been included in this Financial Performance Representation.
The information included in the Table below is based on reports submitted to us by 106 fully-reporting franchised (traditional) Golden Krust Caribbean Bakery and Grill Restaurants located in the United States that were operated for the entire 2023 Fiscal Year. The Table excludes 5 franchised restaurants that were not operated for the entire 2023 Fiscal Year (closed for a portion of the year for renovations or opened as a new location) and restaurants for which 100% of sales were not disclosed. The Table does not include any company-owned or affiliate-owned stores. No franchised Golden Krust Caribbean Bakery and Grill Restaurants that opened or closed during the 2023 Fiscal Year are included in the information contained in this Table. No franchised Golden Krust Caribbean Bakery and Grill Restaurants that that failed to submit all 52 weeks of sales reporting during the 2023 Fiscal Year that are included in the information contained in this Table. The information was collected by us, but has not been independently audited or verified.
Specifically, the information in the four tables is organized into four quartiles ("Quartiles") which were determined based on the Gross Sales generated by those respective 106 franchised locations during the 2023 fiscal year in descending order. The first quartile is comprised of the 26 franchised locations that generated the most Gross Sales during the 2023 fiscal year ("First Quartile"); the second quartile is comprised of the next 26 franchised locations ("Second Quartile"); the third quartile is comprised of the next 27 locations ("Third Quartile"); and the fourth quartile is comprised of the remaining 27 locations ("Fourth Quartile").
Gross Revenues of Golden Krust Caribbean Bakery and Grill Franchised Restaurants/Golden Krust Caribbean Restaurant (Traditional)
| PROVISION | SECTION IN FRANCHISE | SUMMARY | |
|---|---|---|---|
| AGREEMENT | |||
| (q) Non-competition | Section VII | No controlling ownership interest in, or | |
| covenants during the | perform services for, competitive business | ||
| term of the franchise | anywhere. | ||
| (r) Non-competition covenants after the franchise is terminated or expires | Section XVI.D. | No interest in competing business for 2 years at, or within 10 miles of premises of Restaurant or within 5 miles of any other Golden Krust Restaurant that is in operation or under construction (same restrictions apply after assignment) | |
| (s) Modification of the agreement | Section XVIII.G. | No modifications generally but Brand Standards Manual and System Standards are subject to change. | |
| (t) Integration/Merger clause | Section XVIII.H. | Only the terms of the Franchise Agreement (including the Brand Standards Manual) are binding. Any other promises may not be enforceable. Nothing in the Franchise Agreement or in any related agreement is intended to disclaim our representations made in the Franchise Disclosure Document | |
| (u) Dispute resolution by | Section XVIII.E. |
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 29–32)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the financial performance representation is a historic one based on existing traditional Golden Krust Caribbean Bakery and Grill Restaurants. The data is derived from reports submitted by 106 fully-reporting franchised Golden Krust Caribbean Bakery and Grill Restaurants located in the United States. These restaurants operated for the entire 2023 fiscal year. The FDD specifically excludes Jerk N' Patties Restaurants from this representation, as there are currently none operating.
Notably, the financial performance representation excludes data from 5 franchised restaurants that did not operate for the entire 2023 fiscal year due to renovations or being new locations. It also excludes restaurants that did not disclose 100% of their sales. The financial performance representation does not include any company-owned or affiliate-owned stores, nor does it include franchised Golden Krust Caribbean Bakery and Grill Restaurants that opened or closed during the 2023 fiscal year or failed to submit all 52 weeks of sales reporting. The franchisor collected the information, but it has not been independently audited or verified.
The 106 locations are divided into quartiles based on gross sales generated during the 2023 fiscal year. The first quartile consists of the 26 locations with the highest gross sales, followed by the second quartile with the next 26, the third quartile with 27, and the fourth quartile with the remaining 27 locations. The FDD emphasizes that the gross revenues presented are not net of costs of goods sold or other operating expenses, as Golden Krust Caribbean Restaurant does not regularly collect this data from franchisees and does not operate enough company-owned restaurants to present reliable figures. Prospective franchisees should also note that written substantiation for the financial performance representation will be made available upon reasonable request.
The FDD explicitly states that the financial performance representations do not reflect the cost of sales, operating expenses, or other costs that must be deducted from gross revenues to obtain net income or profit. Franchisees will incur expenses such as inventory, labor, rent, preopening expenses, depreciation and amortization, taxes, insurance, operating expenses, royalty fees, advertising fees, professional fees, bank charges, telephone, and repairs. All these expenses will affect the operating profit, net income, and/or cash flow of a traditional Golden Krust Caribbean Bakery and Grill Restaurant, and prospective franchisees should carefully consider and evaluate them.