# Franchise Unit Financial Performance Report **Business:** Fictional Coffee Shop Franchise **Reporting Period:** October 2026 **Currency:** USD ## 1. Revenue and Cost Overview | Category | Amount | |---|---:| | Monthly Revenue | $80,000 | | Cost of Goods Sold | $24,000 | | Labor | $18,000 | | Rent | $10,000 | | Utilities | $3,000 | | Other Operating Expenses | $5,000 | ## 2. Gross Profit Gross Profit = Revenue - Cost of Goods Sold $80,000 - $24,000 = **$56,000** Gross Margin = $56,000 / $80,000 × 100 **Gross Margin: 70.00%** ## 3. Franchise Payments **Royalty Payment** $80,000 × 6% = **$4,800** **Marketing Contribution** $80,000 × 2% = **$1,600** **Total Franchise Payments: $6,400** ## 4. Total Operating Expenses | Category | Amount | |---|---:| | Cost of Goods Sold | $24,000 | | Labor | $18,000 | | Rent | $10,000 | | Utilities | $3,000 | | Other Expenses | $5,000 | | Royalty | $4,800 | | Marketing Contribution | $1,600 | | **Total** | **$66,400** | ## 5. Unit Operating Profit $80,000 - $66,400 = **$13,600** **Operating Margin** $13,600 / $80,000 × 100 = **17.00%** ## 6. Management Findings - The unit generated $80,000 in monthly revenue. - Gross profit was $56,000. - Franchise payments totaled $6,400. - Operating profit was $13,600. - The operating margin was 17.00%. These calculations reflect only the supplied expense categories. ## 7. Recommended Actions 1. Review product-level gross margins. 2. Monitor labor cost against actual revenue. 3. Review rent as a percentage of revenue. 4. Track royalty and marketing payments separately. 5. Compare performance across multiple periods. 6. Prepare a full cash flow model before evaluating investment payback. ## 8. Data Limitations The analysis excludes taxes, financing costs, depreciation, and other unspecified expenses. Operating profit is not equivalent to net income or cash flow. ## Conclusion The franchise unit generated $13,600 in operating profit, representing a 17.00% operating margin. The result is a historical operating calculation based on the supplied fictional figures, not a guaranteed future return.