Summary
of Factual Basis for Data:
In
2005, V2K Window Fashions,
inc. ("V2K") changed
its fiscal year end from
December 31St to September
30th. V2K prepared its updated
Franchise Offering Circular,
of which this Statement
of Annual Revenues and Gross
Margins (this "Statement")
is a part, for the fiscal
year ended September 30,
2006.
The
financial statements for
the top three franchises
are for calendar year 2005.
V2K's top three franchises
all have December31st fiscal
year ends, and thus, 2006,
financial statements for
these franchises were not
available as of the date
of issuance of the Franchise
Offering Circular.
Each
V2K franchise is managed
differently. As such, the
results, and in particular,
the actual net income of
each franchise, will vary
on a variety of factors,
including individual or
business entity tax situations
and advice from tax consultants.
The Profit and Loss Statements
included in this Statement
were prepared for tax purposes.
As
of November 30, 2006, a
total of 181 V2K Window
Fashions franchises were
in operation. Of those 181
franchises, 75 had been
in operation for less than
24 months, and 32 had been
in operation for less than
12 months. The management
of V2K believes that it
takes a franchisee an average
of 24 months to fully establish
a V2K Window Fashions business.
The
five franchises included
in the Annual Revenues and
Gross Margins Chart represent
approximately 2.8% of the
total V2K Window Fashions
franchises that were operating
as of November 30, 2006.
All of these five franchises
have been in operation for
at least two years. These
five franchises are located
in the states of California,
Colorado, Florida, New Jersey
and Virginia; however, V2K
does not believe that the
geographical areas involved
are significant. Instead,
V2K believes that these
franchises achieved their
high level of performance
because of the skills and
efforts of the franchisees
and the amount of time the
franchises had been in operation.
Two
of the five franchises in
the Annual Revenues and
Gross Margins Chart, or
40%, achieved at least the
average Total Revenue shown
in the Annual Revenues and
Gross Margins Chart; and
two of the five franchises
in the Annual Revenues and
Gross Margins Chart, or
40%, achieved at least the
average Product Sales Gross
Margins. Of the 149 V2K
franchises that had been
open for at least one year
as of November 30, 2006,
two, or approximately 1.3%,
achieved at least the average
Total Revenue shown in the
Annual Revenues and Gross
Margins Chart; and two,
or approximately 1.3%, achieved
at least the average Product
Sales Gross Margins.
V2K
computed the averages in
the Annual Revenues and
Gross Margins Chart based
on franchisee product orders
processed by V2K. The franchisee
orders provide V2K with
information about the prices
franchisees charge their
customers for products and
installation services; and
by processing the orders,
V2K is also aware of the
Cost of the products paid
by the franchisees. From
this information, V2K can
determine the total revenues
of the franchisees from
product sales and installation,
and the gross margin on
those product sales; but
not the gross margin on
installation services, and
thus, not the total gross
margin of the franchises.
THE
FINANCIAL RESULTS SHOWN
IN THE ANNUAL REVENUES AND
GROSS MARGINS CHART DO NOT
CONTEMPLATE ANY EXPENSES
OF YOUR BUSINESS OTHER THAN
PRODUCT PURCHASES. YOU SHOULD
CONDUCT AN INDEPENDENT INVESTIGATION
OF THE COSTS AND EXPENSES
YOU WILL INCUR IN OPERATING
YOUR BUSINESS. Franchisees
or former franchisees of
V2K, which are listed in
the Offering Circular, may
be one source of this information.
The Top Three Franchisees'
Profit and Loss Statements
(the "Financial Statements")
that follow the Annual Revenues
and Gross Margins Chart
were prepared by those franchisees
for tax purposes and provided
by those franchisees to
V2K. It is a common practice
for businesses to. prepare
financial statements for
tax purposes, and then to
recast them to more accurately
portray operating income.
Two
of the franchises represented
by the Financial Statements
had been operating for over
two years as of the end
of 2005; the other franchise
had been in operation for
over one year as of the
end of 2005. V2K has independent
information only concerning
the Income and Cost of Goods
Sold listed in the Financial
Statements. THESE
FINANCIAL STATEMENTS ARE
UNAUDITED. EXCEPT AS STATED
IN THIS PARAGRAPH, V2K MAKES
NO REPRESENTATIONS REGARDING
THE ACCURACY OF TW INFORMATION
PROVIDED. NO ACCOUNTANT
EMPLOYED BY V2K OR ENGAGED
BY V2K EXPRESSES ANY OPINION
ABOUT THE ACCURACY OF THE
FINANCIAL STATEMENTS. V2K
HAS NOT UNDERTAKEN ANY INVESTIGATION
OF THE FINANCIAL RECORDS
OR OTHER RECORDS OF THE
FRANCHISEES. |
