Zoup Financial Performance p2
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Zoup Financial Performance p2

 

Zoup! ITEM 19
FINANCIAL PERFORMANCE REPRESENTATIONS

 

                The FTC’s Franchise Rule 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, by example, by providing information about possible performance at a particular location or under particular circumstances. 

                There were 22 Zoup!® Restaurants in operation at the end of 2009.  This Item presents historical data for 20 Restaurants operated during the 2009 calendar year that have always been identified under the mark “Zoup!®” and that are substantially similar to our Zoup!® Restaurants offered under this Disclosure Document.  We excluded two Zoup!® businesses operated during 2009 from this Item 19 because they do not meet our current criteria for the development of Restaurants and we do not believe they are representative of the Zoup!® Restaurant franchise being offered under this Disclosure Document.   Both of the excluded Restaurants are located in Michigan.  One of the excluded Restaurants is franchised and the other is owned by our affiliate.  Of the 20 Restaurants included in this Item, 5 Restaurants are owned and operated by our affiliate Zoup! Fresh Soup and 15 are franchised businesses. 

Please carefully read all information in this Item 19, including the Notes and Assumptions following the Table, which explain the information and the limitations on the information contained in the Table. Substantiation of the data used in preparing this information will be made available upon reasonable request. 

Average Sales

Franchise and Affiliate Operations

December 29, 2008 through December 27, 2009

(52 Weekly Sales Periods)

 

Michigan Locations – 9 Units

 

Zoup!® Michigan Locations

9 Units

Annual 2009 Gross Sales

Average Weekly 2009 Gross Sales

Highest Gross Revenue Zoup!® Location in Group

$751,205

$14,446

Lowest Gross Revenue Zoup!® Location in Group

$287,692

$5,532

Average of all 8 Michigan Locations in Group [4 of the 9 (44.4%) met or exceeded the average]

$499,635

$9,608

 

Ohio Locations – 3 Units

 

Zoup!® Ohio Locations

3 Units

Annual 2009 Gross Sales

Average Weekly 2009 Gross Sales

Highest Gross Revenue Zoup!® Location in Group

$712,301

$13,698

Lowest Gross Revenue Zoup!® Location in Group

$309,301

$5,948

Average of all 3Ohio Locations in Group [2 of the 3 (66.6%) met or exceeded the average]

$537,176

$10,330

 

Pennsylvania Locations – 3 Units

 

Zoup!® Pennsylvania Locations

3 Units

Annual 2009 Gross Sales

Average Weekly 2009 Gross Sales

Highest Gross Revenue Zoup!® Location in Group

$795,807

$15,304

Lowest Gross Revenue Zoup!® Location in Group

$467,813

$8,996

Average of all 3Pennsylvania Locations in Group [1 of the 3 (33.3%) met or exceeded the average]

$592,352

$11,391

 

New Locations Opened in 2009 – 5 Units (Not Opened for the Full Year)

 

Zoup!® New Locations

5 Units

Annual 2009 Gross Sales

Average Weekly 2009 Gross Sales

Highest Gross Revenue Zoup!® Location in Group

N/A

$22,772

Lowest Gross Revenue Zoup!® Location in Group

N/A

$5,817

Average of all 5 New Locations in Group [2 of the 5 (40%) met or exceeded the average]

N/A

$12,208

 

  •  “Gross Sales” means the entire amount of all of the revenues from the operation of the Restaurant net of applicable sales tax.  
  • This table does not contain any information regarding the expenses you may incur in operating your business. 

Average Cost of Goods Sold and Labor as a % of Gross Sales

Affiliate Operations Only

January 1, 2009 through December 31, 2009 

In Calendar year 2009, 5 Affiliate Restaurants met the criteria to be included in this Item 19.  The Average Cost of Goods Sold as a percentage of gross sales for the 5 affiliated Restaurants was 35.8% [3 of the 5 (60%) met or exceeded the average].  The average payroll costs, excluding the general manager, as a percentage of gross sales for the 5 affiliated Restaurants was 14% [2 of the 5 (40%) met or exceeded the average].  The average general manager’s annual compensation for the 5 affiliated Restaurants was $34,920 [3 of the 5 (60%) met or exceeded the average]. 

  • Cost of Goods Sold (COGS) includes the cost of all food products, condiments and packaging costs.  The percentage is determined by dividing the COGS by Gross Sales. 
  • Payroll Costs exclude the manager’s compensation, all payroll taxes and payroll related benefits. The percentage is determined by dividing the Payroll Costs by Gross Sales. 
  • General Manager’s annual compensation excludes all payroll taxes and payroll related benefits. 
  • This analysis does not contain complete information containing the expenses you will incur in operating your business. 

Notes:

 1.            Gross Sales do not reflect the actual potential income of a Restaurant and should not be relied on in calculating profitability.  There are a number of fixed and variable costs associated with a Restaurant, not all of which are reflected in the information above and that vary among individual Restaurants.  These expenses, which are likely to be significant, include, but are not limited to, the following: the certain costs listed above, costs described in Items 6 and 7 of this Franchise Disclosure Document, including the 6% royalty fee; interest or finance charges if you finance some or all of the cost of the franchise; depreciation on property and equipment; occupancy costs; store supplies; credit card fees; worker’s compensation and general liability insurance; taxes; national advertising fund; customer service and training fund; tech fund; accounting and legal fees and general administrative expenses; any pre-opening or amortization of organization costs; costs associated with regulatory compliance; management costs; fringe benefits; and certain repairs and maintenance.  We strongly encourage you to consult with your financial advisors in reviewing the table and, in particular, in estimating the categories and amount of additional expenses you will incur in establishing and operating a Restaurant. 

2.            You should be aware that you may incur expenses that may not be incurred by affiliate owned Restaurants 

3.            You should also be aware that the financial performance of any particular Restaurant might be affected by a number of factors that may vary due to the individual characteristics of the Restaurant.  These factors include, but are not limited to: competition from other restaurants; appreciation and acceptance of the products offered by your Restaurant in the community in which your Restaurant is located; your efforts; your experience; the quality and effectiveness or your managerial skills; and your decisions with respect to location, additional advertising programs, personnel and cost controls; geographic and socioeconomic conditions in you locality; business cycles; the performance of the local, national and world economy.

Some Restaurants have achieved the sales and expense amounts described above in this Item.  Your individual results may differ.  There is no assurance that you will achieve the same sales and expense amounts.

Financial Information for Specific Operating Units 

We may give a prospective franchisee who is seeking to buy a specific operating unit, whether owned by us or another franchisee, actual operating results of that unit. 

EVEN IF YOU ACHIEVE OR EXCEED THE HIGHEST RESTAURANT REVENUES DESCRIBED IN THIS ITEM, THERE IS NO GUARANTY THAT YOUR RESTAURANT WILL BE PROFITABLE.  WE DO NOT REPRESENT OR GUARANTY THAT YOUR RESTAURANT WILL BE PROFITABLE. 

THE GROSS SALES AND EXPENSE DATA IN THE TABLE IS A COMPILATION OF INFORMATION FROM EXISTING RESTAURANTS AND SHOULD NOT BE CONSIDERED AS THE ACTUAL RESULTS THAT WILL BE REALIZED BY YOU.  Gross sales AND GROSS PROFIT do not reflect the actual potential net income of a Restaurant and should not be relied on in calculating profitability.  There are a number of fixed and variable costs associated with a Restaurant, not all of which are reflected in the table and that vary among individual Restaurants.  WE DO NOT REPRESENT THAT YOU CAN EXPECT TO ATTAIN ANY OF THE RESULTS REFLECTED IN THE TABLE.  ACTUAL RESULTS WILL VARY FROM RESTAURANT TO RESTAURANT AND WE CANNOT ESTIMATE OR GUARANTEE THE RESULTS OF ANY SPECIFIC RESTAURANT.  ACTUAL SALES AND EARNINGS OF A RESTAURANT ARE AFFECTED BY MANY FACTORS, SOME OF WHICH ARE NOTED BELOW, INCLUDING YOUR OWN EFFORTS, ABILITY AND CONTROL OF THE RESTAURANT, AS WELL AS FACTORS THAT ARE BEYOND YOUR CONTROL.

We recommend that you make your own independent investigation to determine whether or not the franchise may be profitable to you.  You should use the above information only as a reference in conducting your analysis and preparing your own projected income statements and cash flow statements.  We suggest strongly that you consult your financial advisor or personal accountant concerning financial projections and federal, state and local income taxes and any other applicable taxes that you may incur in operating a franchised restaurant. 

Other than the preceding financial performance representation, we do not make any financial performance representations.  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 Eric Ersher, 28290 Franklin Road Southfield, MI 48034, 248-663-1111, the Federal Trade Commission, and the appropriate state regulatory agencies.