For a Kitchen Solvers franchise, how is 'Gross Revenue Less Disclosed Expenses' calculated in Table 1?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
3,139,039 | $184,528 | $873,586 | 43% |
General Notes and Defined Terms for Tables 1 through 3:
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- "Gross Revenue" means the total reported revenues and receipts from the sale of all products and services sold through each Item 19 Outlet. Gross Revenue does not include sales tax.
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- "Range" provides the lowest and highest outcome experienced for each category.
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- "Job" means a customer contract for one job.
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- "Materials Expenses" means the cost of all direct materials purchased by the Item 19 Outlet to complete all customer projects during the Measurement Period.
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- "Installation Expenses" means the total amount of money spent on all subcontracted and employed labor needed to install and fulfill customers contract obligations by the Item 19 Outlet.
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- For purposes of Table 1, "Gross Revenue Less Disclosed Expenses" is defined as Gross Sales less Materials Expenses and Installation Expenses.
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- For purposes of Materials Expense and Installation Expense, a franchisee is considered to have met or exceeded the average if they experienced total expense amounts equal to or less than the related averages identified in the tables above.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 40–44)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, Table 1 includes a calculation called "Gross Revenue Less Disclosed Expenses." For Kitchen Solvers franchises, this figure is calculated by taking the Gross Revenue and subtracting both Materials Expenses and Installation Expenses. Gross Revenue includes all revenues and receipts from product and service sales, but does not include sales tax. Materials Expenses are the costs of direct materials purchased to complete customer projects. Installation Expenses are the total costs spent on subcontracted and employed labor to fulfill customer contracts.
This calculation provides a view of revenue after deducting some of the most direct and immediate costs associated with completing a job. It can help a prospective franchisee understand the profitability of jobs before considering other overhead costs.
However, it is important to note that this "Gross Revenue Less Disclosed Expenses" figure does not represent net income or profit. As stated in the FDD, other operating expenses, costs, and fees such as royalty fees and marketing expenses are not included in this calculation. A prospective franchisee should conduct their own independent investigation of all costs and expenses they will incur while operating a Kitchen Solvers franchise.