I'm trying to revise my calculations of the following for a theoretical Dunkin franchise in South Africa:
Question:
I'm trying to revise my calculations of the following for a theoretical Dunkin franchise in South Africa:
- Forecasted annual sales and revenue and market share
- Expected annual return on investment
- An analysis of the breakeven point for each year
- How you arrived at your suggested price including acceptable profit margins, channels of distribution, and competitors' pricing for similar products
I submitted the following:
"Forecasts
For forecasting efforts, I will be using a statistically mid-range Miami, FL franchise, as the city's annual GDP of around US$300 billion is comparable to that of South Africa (World Economic Forum, 2016). Additionally, I'll be using a non-drive through location, as only 31% of South African households have a car (de Villiers, 2019).
The franchise owner also owes a one-time franchise fee, which for Miami, FL is US$80,000, as well as yearly continuing franchise fee of 5.9% of gross sales and a continuing advertising fee of 5% of gross sales (Franchise Chatter, 2022). The breakeven analyses in Tables 1-3 account for 1.5% growth each year, which was determined based on the 1.5% percent projected population growth of South Africa as reported by the World Population Review (2023). And the profit for year one is based on the average yearly restaurant sales of a non-drive through franchise in the US south of US$965,916 (Franchise Chatter, 2022)."
From those numbers, I built out Y1 and Y2 best-, average-, and worst-case scenarios in terms of expenditures, average sales, franchise fees, start-up costs, and profit/loss.
I received a 0 for the sections and the feedback I received was:
Governmental and Nonprofit Accounting
ISBN: 978-0132751261
10th edition
Authors: Robert Freeman, Craig Shoulders, Gregory Allison, Robert Smi