How about those top 25 and top 50 metrics?
Clever Nick wants us to pay attention to the best-performing kiosks. Never mind what those losers with lousy locations or problem machines are doing! You're gonna be one of our best and brightest, just like RoBoZo!
If you take the performance of the top 50 and eliminate the performance of the top 25, things get a little less sanguine.
The leaders of the pack with those top 25 machines churn out revenue at a rate of $198.45 per day per kiosk, or over $72,000 a year. But if you eliminate those high-performers and focus on the next 25, things look a lot less rosy. It turns out that the machines in the second 25 only manage to generate revenue of $92.55 per day, or just shy of $34,000/year.
Between franchise fees, sales taxes, COGS and percentage rent, those guys are giving up around 55% of their revenues before miscellaneous expenses. That brings the $34,000/year down to about $15,300/year.
So, there you go - a guy who is lucky enough to own a kiosk that is in the upper 20th percentile will only manage to earn enough to get his money back after 4 years with a machine that has an expected useful life of about the same length of time. Who knows, maybe you get it to work for 5 years (or more)? Does that payback period and prospective tail end earnings excite you?
And, of course, if you get a kiosk that is a middle of the pack performer (as you should expect), your prospects are even more gloomy. You might not even make your money back after all your hard work for the 4-year period.
I suppose Nick has a little time before he has to update his franchise disclosures to reveal more recent performance, but when he does, it's going to be a whole lot tougher to sell franchises.
AI
