How Much Money Can I Make?
How well do our franchisees do in their businesses?
Profitability will vary considerably depending upon such factors as: location, operating costs, financing terms, your ability to manage and control the business, sales and other factors. We do not predict sales or profits for any new locations. We encourage you to discuss this with existing franchisees and your personal advisors.
Do you make Financial Performance Representations in the Franchise Disclosure Document?
Yes, our Franchise Disclosure Document includes detailed information regarding the financial performance of our affiliate and franchise locations. The details of our Item 19 are below.
FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC’s Franchise Rules permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.
2018 Gross Sales – All 51 PANCHERO’S restaurants operating 2016-2018
As of December 31, 2018 there were 51 PANCHERO’S Restaurants (28 franchised restaurants and 23 affiliate-owned restaurants that we operated under a license agreement and management agreement) in operation for the entire three calendar years 2016 to 2018, excluding one restaurant that is located in a shopping mall, which we consider a Closed Market. We excluded the mall-based restaurant because this franchise offering is for a restaurant that we recommend be developed in a retail strip center, preferably an end-cap location, and mall-based restaurant performance will not be relevant to the type of restaurant you will operate.
The following chart reflects the 2018 gross sales of all 51 restaurants (franchised and affiliate-owned) that were in operation the full three-year period 2016 to 2018.
|All 51 Restaurants||$1,128,4632||$1,120,2132||$2,181,574||$371,672|
|28 Franchised Restaurants||$1,030,6373||$870,7403||$2,181,574||$371,672|
|23 Affiliate-owned Restaurants5||$1,247,5554||$1,330,7514||$2,054,371||$500,546|
These financial performance figures do not reflect royalty fees, advertising fund contributions, operating expenses, or other costs or expenses that must be deducted from gross sales to obtain your net income or profit. “Gross Sales” has the same meaning as Gross Revenues which is all revenue derived from the operation of the Franchised Restaurant, including sales revenue derived from off-premises sales, whether received in cash, in services in kind, from barter and/or exchange, on credit (whether or not payment is received) or otherwise, less any sales tax or other taxes collected from your customers if paid to the appropriate taxing authority. Gross Sales also does not include the amount of any documented refunds and credits given in good faith to customers (but only if the original amounts were included in Gross Sales). All barter and/or exchange transactions for which you furnish services and/or products in exchange for goods or services to be provided to you by a vendor, supplier or customer will, for the purpose of determining GrossSalesbe valued at the full retail value of the goods and/or services provided to you.
- 9 (or 32%) of franchised restaurants met and 14 (or 61%) of affiliate-owned restaurants met or exceeded this average; and 10 (or 36%) of franchised restaurants and 15 (or 65%) of affiliate-owned restaurants met or exceeded this median.
- 11 (or 39%) of franchised restaurants met or exceeded this average and 14 (or 50%) of franchised restaurants met or exceeded this median.
- 12 (or 52%) of affiliate-owned restaurants met or exceeded this average and 11 (or 48%) of franchised restaurants met or exceeded this median.
- In determining how relevant these affiliate-owned restaurants’sales data may be to your situation, characteristics of affiliate-owned restaurants may differ substantially from the restaurant that you will operate depending on your previous experience, competition and demographics in your area, and length of time that affiliate-owned restaurants have operated as compared to your restaurant.
2018 Food and Paper Costs
26 Affiliate-Owned PANCHERO’S restaurants operating Full 12-Months
The following chart reflects the 2018 food and paper costs for the 26 affiliate-owned restaurants that we operate, that were in operation the full 12 months of 2018.
These 26 restaurants use a common back office system and common food cost calculation procedures. There are no franchised restaurants in this group.
- The above costs do not include labor, rent, utilities, and other costs incurred by affiliate-owned restaurants. Franchised restaurants may incur additional costs that affiliate-owned restaurants do not have, including royalty payments, training expenses,and certain advertising fees.
- 18 (or 69%) of these 26 restaurants met or exceeded this average.
- 16 (or 62%) of these 26 restaurants met or exceeded this average.
Some Restaurants have sold these amounts. Your individual results may differ. There is no assurance that you will sell as much.
Written substantiation for the financial performance representation will be made available to you upon reasonable request. Except for the information presented above, 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. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting Rodney Anderson, 2475 Coral Ct., Suite B, Coralville, Iowa 52241 (319) 545-6565, the Federal Trade Commission, and the appropriate state regulatory state agencies.