Whether you’re a first-time franchisee or an existing owner, it’s mission critical that you pay close attention to the entire process. Especially as it relates to signing a development agreement. The steps we’ve built in are there to protect you and us while we determine together if we’re the right fit for each other – both financially and culturally.
One of the most integral parts of purchasing a franchise is your review of the Franchise Disclosure Document (FDD) that you will receive from any franchisor, including Central Bark. It holds significant material that you as a franchisee need to know about the agreement you may enter. An FDD can be quite heavy with important information, so a great way to approach it is by already knowing what to look out for. This is especially true as it relates to Item 19 in the FDD. Here’s how to read a Central Bark Item 19 in our FDD.
Central Bark Item 19
An Item 19 is a financial performance representation that is any written or oral statement, or communication made by a franchisor to a franchisee and/or public about the actual or potential financial performance of a franchised business. The definition of what qualifies as and constitutes a financial performance representation is broad and includes historical data, projections, and pro-formas. Under the Federal Franchise Rule, financial performance representations are defined as: “Any representation, including any oral, written, or visual representation, to a prospective franchisee, including a representation in the general media, that states, expressly or by implication, a specific level or range of actual or potential sales, income, gross profits, or net profits. The term includes a chart, table or mathematical calculation that shows possible results based on a combination of variables.”
Questions Asked
In the ordinary course of the Central Bark franchise sales process, prospective franchisees usually ask questions about the actual or potential financial performance of our franchised business. Questions like:
- “What do your numbers look like?”
- “How much can I make or take home?”
- “Can you help me project my revenues and earnings as a franchisee?”
- “What should I estimate my revenues to be in years one, two, three, etc.…?”
- “What kind of profit margin should I expect?”
- “Can you give me a pro forma worksheet to estimate my revenues and profit?”
From a sales perspective, answers to these questions could provide franchisees with important validating factors and metrics for comparison. We understand that. And that’s why we’ve built out a robust Item 19 in our new FDD so that you can better understand how owning a Central Bark franchise works.
How to Read a Central Bark Item 19 in our FDD
As part of our new Item 19, you’ll see that we broke down gross sales across Central Bark facilities during the 2020, 2021, and 2022 fiscal years. We break down those years into terciles so you can get a complete view of the system and how we’re performing year-over-year. Over the last two years, our top performers have earned in average over $1.2 million. Furthermore, we provide information regarding average profit across Central Bark in 2022, 2021, and 2020, which shows high double-digit growth across the system over the last several years.
As a franchisor, Central Bark will provide written substantiation for these financial performance representations to prospective franchisees upon reasonable request. The gross sales, revenue and expense data presented in our Item 19 is based on information reported to us by franchisees. We have not independently verified this data. Some Central Bark facilities have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.
Franchising with Central Bark
Selecting to purchase a Central Bark franchise requires more than just knowledge about how we stay on top of our competition but also how we make use of opportunities and operate to make sure you have the best chance for your business to profit from the at the start of your operations. It is essential to be aware of how to analyze an FDD and an Item 19 to make the best possible decision when choosing franchise. It gives you a better idea of what to expect with the franchise and its potential.
Franchise Information
For more information Central Bark franchising opportunities, visit centralbarkusa.com/franchising.