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Active Green + Ross Franchise
Financial Information
The financial investment required to
purchase an Active Green + Ross franchise will vary, depending on the size and location of
the franchise. Investors can expect to invest up to $200,000.00 for an average franchise.
All franchisees operate as
independent businesses and the nature of each operation will vary
significantly. Accordingly, we have no standard operating or financial
ratios. The undernoted financial information is for illustrative
purposes only, actual results will vary significantly by franchisee
and location.
(Notes 1 and 2)
| Tires |
270,000 |
360,000 |
540,000 |
| Labour |
247,500 |
330,000 |
495,000 |
| Parts |
232,500 |
310,000 |
465,000 |
|
750,000 |
1,000,000 |
1,500,000 |
(note 3)
| Tires |
216,000 |
288,000 |
432,000 |
| Labour
(note 4) |
111,375 |
148,500 |
222,750 |
| Parts |
139,500 |
186,000 |
279,000 |
|
466,875 |
622,500 |
933,750 |
(Note5)
Wages
(assistant manager) |
-- |
20,000 |
40,000 |
| Wages
(mechanics and technicians) (Included in Labour Costs) |
-- |
-- |
-- |
| Employee Benefits |
16,706 |
22,275 |
33,416 |
| Rent |
60,000 |
72,000 |
80,000 |
| Equipment Rent |
29,000 |
29,000 |
29,000 |
| Realty Taxes |
12,400 |
15,600 |
20,400 |
| Royalty |
37,500 |
50,000 |
75,000 |
| Advertising |
18,750 |
25,000 |
37,500 |
| Utilities &
Telephone |
15,000 |
15,000 |
15,000 |
| Ins. & Business Taxes |
3,000 |
3,000 |
3,500 |
| Bank Chrgs./Crdt. Card
Dis. |
9,900 |
13,300 |
19,800 |
| Legal & Accounting |
3,000 |
3,000 |
4,000 |
| General & Office |
4,300 |
5,700 |
7,600 |
| Shop Supplies |
13,000 |
17,000 |
22,700 |
| Vehicle Expenses |
4,000 |
4,000 |
4,000 |
|
226,556 |
294,875 |
391,913 |
SUMMARY:
| Operations
Income |
56,569 |
86,625 |
174,338 |
| Other
Income (note 6) |
10,000 |
15,000 |
25,000 |
| EBITDA
(note 7) |
66,569 |
97,625 |
199,338 |
The above is for
information purposes only. Active Tire & Auto Centre Inc. does not
provide any assurance whatsoever that the above results will be
achieved.
See attached notes
for further information and explanations.
All franchises operate as independent businesses
and the nature of each operation will vary significantly. The
included financial information is for illustrative purposes only,
actual results will vary significantly by franchisee and location.
Active Tire & Auto Centre Inc. does not provide any assurance
whatsoever that the included results will be achieved.
See attached notes for further information and
explanations.
1) Sales mixes for all locations in 2007 was: Tires (42%),
Labour (29%) and
Parts (29%). (Calendar year end 2007, includes Wholesale location).
Sales mixes for all locations doing less than 50% of tire sales as
wholesale tire sales was: Tires (38%), Labour (31%) Parts (31%).
Pro forma examples are shown with sales mix of
Tires (36%), Labour (33%) and Parts (31%) which are representative
of an average store. Change of sales mix will affect gross
profit calculations. Larger volume stores tend to have a
larger % of tires in the sales mix.
2) Total annual sales were estimated at $750,000,
$1,000,000 and $1,500,000 for illustrative purposes only. Actual
annual sales for all locations for Fiscal Year End 2007 are
averaged as follows:
(Wholesale locations excluded; average store sales based on store
open at least 1 year)
2007 Sales Averaged
as Follows:
- Top 10 locations $ 2,208,459
- Top 15 locations $
2,044,351
- Top 20 locations $ 1,906,652
All locations:
- Average 2007 $ All locations - 1,390,915
- Average 2006 $ All locations - 1,340,229
- Average 2005 $ All locations - 1,329,986
- Average 2004 $ All locations - 1,293,857
- Average 2003 $ All locations - 1,218,820
3) Cost of sales were determined using the following
estimated gross profits:
- Tires 20%
- Labour 55%
- Parts 40%
- Overall Gross
Profit 38%
4) Technicians are paid using the flat rate system.
Usually anywhere from 30% to 43% is paid out for wages. We have
calculated using a cost of labour at 45% and a gross profit from
labour of 55%. Employee benefits is shown separately.
5) Expenses shown on the financial information are
estimated as follows:
a) Employee benefits are estimated at 15% of total
labour costs.
b) Equipment rent and leases are estimated based on
total equipment of $125,000 leased over 5 years with interest at 10%
and a 10% buyout at the end of the lease term.
c) Royalties are calculated based on 5% of total
sales.
d) Advertising is calculated based on 2.5% of total
sales.
e) All other expenses are estimated based on average
expenditures incurred on an annual basis.
6) Other income is estimated on the average purchase
rebates given from the authorized auto parts suppliers and the Active
Green + Ross rebate program.
7) EBITDA - This represents the earnings before
taxes, interest, depreciation and amortization.
Copyright © 2001-2007 by Active Green + Ross. All Rights Reserved
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