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, for example, by providing information about possible performance at a particular location or under particular circumstances.
The financial performance representation which appears below provides Gross Sales information for four new Your Pie restaurants that opened after June 1, 2014 using our new restaurant store model, which is different in many ways from our store model that has been continually used since our predecessor commenced selling franchises in August 2008 (the “New Model”).
The first Your Pie restaurant to use the New Model commenced operation in June 2014 and since that time 3 other Your Pie restaurants have commenced operation using the New Model, one in September 2014, another in November 2014 and the third restaurant in January 2015 (collectively, the “Covered Restaurants”). The financial information in this financial performance representation is provided for all four restaurants with the New Model, irrespective of when they opened. The financial information is presented for each Covered Restaurant from the date the restaurant opened for business to the general public up to and including March 31, 2015.
Of the four Covered Restaurants, one is affiliated with us in that the owners of the entity that is the operator of the Covered Restaurant in the Buckhead section of Atlanta, Georgia are the same individuals who own us. The other Covered Restaurants are located in different suburbs north of Atlanta, Georgia and are owned by franchisees.
The data presented has been generated using financial reports submitted by our affiliate and the franchisees. Prospective franchisees should be advised that no certified public accountant has audited the figures or expressed his or her opinion concerning the figures nor have we verified the gross sales figures provided nor have we asked questions of the franchisees to determine whether they are in fact accurate and complete, although we have no information or other reason to believe the affiliate’s or franchisees’ data is unreliable. Each franchisee-owned restaurant submitted their Gross Sales data on a basis as required by the franchisees’ franchise agreements with us.
Since June 2014, all new Your Pie restaurants which have opened have used the New Model.
|Restaurant Location||Opening Date||No. of Days Open For Business through March 31, 2015||Total Gross Sales Since Restaurant’s Opening Date through March 31, 2015||Average Gross Sales per Day Since Restaurant’s Opening Date Through March 31, 2015|
Notes for Financial Performance Representation:
1. For purposes of this Item 19, “Gross Sales” has the same definition as set forth in the first Explanatory Note below the table in Item 6.
2. The New Model is different from the previous store model in many different ways, such as:(i) we updated our trade dress elements to be more industrial/contemporary in order to highlight our Italian roots and eclectic vibe of Athens, Georgia, (ii) our kitchen area is more exposed to the customers, as is the food preparation area, (iii) the furniture is more contemporary, (iv) pictures hanging on the walls now use a lighter color frame, (v) the walls of the restaurant include more brick and paint colors are brighter, (vi) the floors are a lighter more neutral color, (vii) the lighting is brighter and new fixtures have been designed, (viii) the interior of the restaurant has been designed to enhance the customer’s view of activities occurring in the restaurant, (ix) customers have greater exposure to our offerings of craft beer and wine, (x) we added a grab and go element to our design to enhance the sale of non-core menu items like side salads, (xi) design elements were implemented to enhance the speed with which customers could be served, and (xii) new tables, chairs and booths have been designed for the restaurant. The Covered Restaurants offer the same types of products and services that your Restaurant will offer and face the same kinds of competitive challenges, and receive the same level of support from us that we expect new franchisees will receive.
3. As mentioned above, the Covered Restaurants are all located in or around the Atlanta metropolitan area and are within 20 miles of each other, with 2 Covered Restaurants (Buckhead and Dunwoody) within a 15-20 minute drive of each other. Below is additional information about each of the Covered Restaurants:
- Buckhead – a 1700 square foot free standing building with limited parking in the Buckhead area of Atlanta. Buckhead is a popular upscale residential, business, shopping and dining area in the City. This location has both indoor and outdoor seating, with 70% of the seating being outdoors.
- Snellville – a 2400 square foot restaurant on the end cap of an outparcel of an anchored suburban strip center. Snellville is a suburban community approximately 30 miles ast of Atlanta. This location has approximately 70 seats, 50% of which are in an indoor/outdoor patio.
- Suwanee – a 3200 square foot restaurant on the end cap of a small suburban strip center without a major anchor tenant. Suwanee is a suburban community approximately 25 miles northeast of Atlanta. This location has approximately 100 seats, 15% of which are outdoors.
- Dunwoody – a 2500 square foot restaurant in a large strip center across the street from a major regional mall in Atlanta. The Dunwoody restaurant is in the Perimeter area of Atlanta and is an active business, shopping and dining area. This location has indoor and outdoor seating for 100, 20% of which are outdoors.
4. The Covered Restaurants have only been operating for a limited period of time. We make no representation that the Gross Sales levels shown above will continue or improve. The monthly Gross Sales numbers experienced by the Covered Restaurants were not regularly consistent on a month to month basis.
5. Historical sales may not correspond to future sales due to a variety of factors. A new franchisee’s individual financial results may differ from the results stated in this financial performance representation. We make no representations that these results will be replicated in future Restaurants opening in the Atlanta metropolitan area or in other markets both within and outside the State of Georgia.
6. A Your Pie restaurant’s sales, costs and income will vary significantly depending on a number of factors, including, among other things, the location of the restaurant, competition in the market, pricing decisions, the number of other nearby Your Pie restaurants in the market, the level and types of marketing the restaurant undertakes, the quality of management and service at the restaurant, staffing decisions (including wage rates), and contractual relationships with lessors and vendors.
7. You should conduct an independent investigation and evaluation of the potential performance of your Restaurant and the franchisees operating the Covered Restaurants may be one source for obtaining additional information on the Gross Sales in operating under the New Model.
We also recommend that you consult with your attorney and other advisors before signing any franchise agreement.
8. The Gross Sales figures in the table above do not reflect the costs of sales, operating expenses or other costs or expenses that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised business. Franchisees or former franchisees, listed in the Disclosure Document may be one source of this information. You are responsible for developing your own business plan for your Restaurant, including capital budgets, financial statements, projections and other appropriate factors, and you are encouraged to consult with your own accounting, business and legal advisors in doing so.
9. Written substantiation for the financial performance representation will be made available to the prospective franchisee upon reasonable request.
Other than the preceding financial performance representation, Your Pie Franchising, LLC does 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 Drew French at 1021 Baxter Street, Athens, Georgia 30606, (706) 850-5304, the Federal Trade Commission, and the appropriate state regulatory agencies.