A prospective franchisee's ability (or lack thereof) to identify the sales and costs relevant to his skills and experience can make or break a franchise opportunity. Consider the following data from Uno Chicago Grill's earnings claim statement:

Note: Data represents a portion of the information contained in Section 19 of Uno Chicago Grill's UFOC, 10/3/2005.

The data above tells you that of the 119 stores that were open for the fiscal year ended October 3, 2005, 65 (55%) had sales under $2,200,000 and 54 (45%) had sales in excess of $2,200,000. The median annual sales for an Uno Chicago Grill Franchise is $2,150,000 which, on average, yields a net profit of about $842,500. However, do not be swayed by the profit margin alone, as you should also consider the cost side of the equation. The historical data used as the basis for the claims do not apply to every geographic region, individual location or franchisee, whose experience and business acumen may vary. Clearly, there is no universal way to measure and report those variables. All involved parties should rely on common business sense. Here is a quick tally of some of the Item 19 factors you should evaluate:

1) Sales
Variations in sales are primarily related to the traffic where the restaurant is located and the population, income and level of competition in the core market. The data here is based on a historical performance for the period October 3, 2004 to October 3, 2005. If you are thinking about opening an Uno Chicago Grill in 2006, market conditions may have changed significantly since this disclosure.

2) Cost of Sales
Cost of Sales includes expenses for food, beverages, and paper products. These costs vary based on a restaurant's location, the rates of its supplier and any transportation costs. The price stability of raw materials, as well as charges for spoiled and damaged products and other waste, should also be considered.

3) Payroll Costs
The labor costs listed here exclude the manager's salary and benefits. Will you personally manage the restaurant? Or will you hire a manager? Keep in mind that the manager's experience and business acumen greatly affects the financial success of your business. Furthermore, the labor costs could vary depending on the prevailing wage rates and labor laws of the area in which a restaurant is located and the amount of vacation time granted and insurance provided to employees.

4) Other Direct Expenses
Other direct expenses include those for mall promotions, telephone lines, utilities, maintenance and repairs, small wares, office supplies, laundry and more. For each of these additional expenses that a franchisee incurs, his or her overall expenses will increase significantly.

5) Rent and Occupancy Costs
Rent and occupancy costs will vary depending on many factors, including whether the property was purchased or leased, the size and location of the property and the availability of financing. Site improvement costs have also not been accounted for. Those costs may vary based upon landlord-provided improvements, the size of the space, local zoning and other building requirements.