Worksfornickels, agree - at the end of the day it's about financials. And, unfortunately, CAFS presentation is full of fluff.
As an example, CAFS projects that each CAFE Serendipity store will generate $2 mil in gross revenues. Total gross revenues is projected w/ a distribution of 55% of gross revenues coming from marijuana sales 45% coming from all other non-marijuana products (everything else).
In return, CAFS charges $25,000 as a franchise fee and 20% of Gross Profits (marketing, advertising, consulting); which is projected at $400,000 per store of CAFS revenues.
For 20 stores that equates to $8 mil
27 million outstanding shares and one is looking at ~ 0.29 cents per share.
Wow. We should be impressed, right?
Here's the problem.
Out of 59 marijuana dispensaries, the average store revenues was $237, 672, yet Cafe Serendipity projects $2 million in gross revenues per store. That's a difference of $176,328.
So let's say it's a marijuana dispensary selling only marijuana averaging $237,672 that is being "re-branded" and they're expanding to sell other stuff (food/beverage/lounging,paraphernalia). Per Cafe Serendipity, marijuana sales would account for 55% of gross revenues and 45% is for everything else.
Okay, well based on the average marijuana dispensary revenues averaging $237,672 (55%), the the new franchisee should generate $196,918.34 in non-marijuana revenues (45%) for a total gross revenue of $437,596.30
So, based on the above information - it's more realistic/genuine to project that CAFS gross profits is closer to $112,519.26 per franchise vs. the $400,000/franchise.
To further extrapolate, 20 franchises would generate $2,250,385.21
in franchising fees; which comes out to ~0.08 cents per share (assuming 27 mil outstanding shares).
That being said, only 1 franchise is open; which means possibly $0.0042/share. For 3 franchises; it might project to $0.0125/share.
And, guess what? Even the above is being generous since it's unlikely that CAFS will have 20 franchises operated for a full year for calendar year 2015 - and because my guess is that CAFS is NOT collecting 20% of gross revenues from existing licensees. When one is a startup company such as CAFS; their going to make some serious concessions just to get the first 10 franchisees signed.
