# What a revision tells you

[What changes between two filings](/what-changes-between-two-filings/) is how
to put two documents side by side. This chapter is the part after that, which
is harder and gets skipped. A number has moved. What is the movement evidence
of?

Most of the time, a year-over-year Item 7 revision is evidence about the
estimate and almost never evidence about the cost of building a restaurant. It
tells you how settled the franchisor's view is. Reading it as construction
inflation, or as a brand getting cheaper or dearer to open, attributes to a
fourteen-row table a precision it was never prepared to carry.

## The one comparable pair, and what moved in it

Mad for Chicken filed on 3 May 2024 and again on 12 March 2025, and the Full
Restaurant and Express Model tables appear in both documents. That makes the
only valid year-over-year Item 7 comparison here, and the result is
unusually clean.

| Line | FDD issued 3 May 2024 | FDD issued 12 March 2025 |
| --- | ---: | ---: |
| Your Training Expenses | $3,000–$6,000 | $4,000–$10,000 |
| Full Restaurant total | $320,125–$687,700 | $321,125–$691,700 |
| Express Model total | $242,500–$466,700 | $243,500–$470,700 |

**One row moved and thirteen did not.** Your Training Expenses rose by $1,000 at
the low end and $4,000 at the high, and that is the entire revision: every other
row of the fourteen-row Full Restaurant table is identical in both documents, and
both totals moved by exactly that $1,000 and $4,000. The Express Model total
moved by the same amounts, which is what a shared row looks like when it is
revised once and carried into two tables.

On a high estimate near $690,000, $4,000 is 0.6 percent. The low moved 0.3
percent. The band did not change shape either — the Full Restaurant's high was
2.15 times its low before the revision and is 2.15 times its low after it. A
reader who came to the pair expecting to learn what a year did to buildout costs
learns that this franchisor's view of them did not move at all.

## Where the change is matters more than how big it is

The useful question is not "how much" but "which row", because a row is a claim
about a specific kind of expenditure and the rows are not equally informative.

A revision to a construction row is a statement about buildouts, and it is the
one that would justify reading the change as evidence about cost. A revision to
the additional-funds row is a statement about how long the franchisor now thinks
a new restaurant takes to stand up, which is closer to a performance disclosure
than to a cost one — see [working capital](/working-capital/). A revision to the
franchise fee is a pricing decision, not an estimate at all. And a revision to a
travel-and-living row, which is what moved here, is a statement about what it
costs to send people somewhere.

In this pair the movement is in the least consequential category available, and
the rows that would have been evidence about building a restaurant —
architectural plans at $10,000–$20,000, leasehold improvements and construction
at $75,000–$235,000, furniture, fixtures and equipment at $85,000–$110,000 —
were reissued unchanged. That is a finding. A franchisor with a year of
additional openings behind it printed the same construction estimate twice.

## The obligation moved and the estimate barely followed

The revision only becomes interesting when it is set beside Item 11 of the same
two filings, and this is the pairing the whole chapter exists for.

Mad for Chicken's classroom requirement is 25 hours in both documents. Its
on-the-job requirement went from **106 hours to 196** — a 90-hour increase, close
to a doubling, in what a franchisee and its staff must complete before opening.
Against that, the estimated cost of training in Item 7 rose by $1,000 at the low
end and $4,000 at the high.

Those two movements are related and they are not equivalent, and the reason is
what the Item 7 row actually contains. Initial training itself is included in the
initial fee, covers up to two franchisee partners and one manager per location,
and runs twenty-eight days; the Item 7 line is travel, lodging and meals. So a
longer programme costs more nights in a hotel, and the $4,000 is a plausible
answer to that question. What it is not is the cost of the additional 90 hours.
That cost lands in payroll for whoever is being trained, in the opening
schedule, and in the working-capital assumption — none of which is the row that
was revised.

This is the general shape of the thing, and it is worth stating as a rule. **An
Item 7 revision measures the reimbursable expense attached to an obligation, not
the obligation.** A franchisor can double a training requirement and move the
Item 7 table by less than one percent, entirely correctly, because the two
disclosures are about different money. The [training
costs](/training-costs/) chapter is where that split is set out row by row, and
the league table at the end of this chapter shows how small the training cell is
in every filing that has one.

## Most revisions are not findings, and saying so is the finding

There is a strong pull toward making a movement mean something, because a
comparison that took an hour and produced "0.3 percent, in the travel row" feels
like a wasted hour. It was not. The conclusion is negative and it is still a
conclusion: this franchisor's estimate of what it costs to open one of its
restaurants did not change across a year in which its training obligation nearly
doubled and its estate contracted.

That last clause is the other half of the honest reading. Across the three Mad
for Chicken filings on file, the affiliate-operated count runs 4 outlets in
FY2021 and 6 in FY2022 in the 13 September 2023 filing, 6 in FY2022 and 12 in
FY2023 in the 3 May 2024 filing, and 10 in FY2024 in the 12 March 2025 filing,
with franchised outlets at 0, 2, 3 and 2 across those years. The 2025 filing
also states, inside Item 19, that four affiliate outlets and two franchised
outlets were excluded from its performance table "because they closed and did
not operate the full year", and that the excluded outlets were open only two to
eleven months of that year.

None of that is a cost disclosure and none of it belongs in an Item 7
comparison. It belongs in the sentence written underneath one. The document
moved; the table almost everybody reads moved by four thousand dollars.

## What a revision cannot tell you

Four limits, each of which has bitten a published comparison somewhere.

A revision is not a price change. A franchisor that reissues a table has
re-estimated, and re-estimating is not the same as anything having happened in a
market. Nothing in Item 7 is a quotation.

A revision is not comparable across brands. Mad for Chicken revised its 2024
table by 0.3 percent at the low end. There is no second brand here with
two comparable Item 7 tables, so there is nothing to say
about whether 0.3 percent is typical, and inventing a normal range from one
observation would be worse than having none.

A revision cannot be measured against a table that is not a format. The 12 March
2025 filing contains a third Item 7 table — a Multi-Unit Development Agreement at
$263,500–$711,700 — which has no counterpart in the earlier document and would
not be comparable to one if it did, because it prices a three-outlet commitment
plus the first outlet rather than a store.
[Reading a multi-unit Item 7](/reading-a-multi-unit-item-7/) is that table's
chapter, and averaging the 2025 filing's three ranges against the 2024 filing's
two would manufacture tens of thousands of dollars of movement out of a $4,000
revision.

And a revision says nothing about a row that was never in the table. Item 7
stops at the end of the stated initial period, so a change in royalty, brand
fund or required-purchase terms will not appear in it at all;
[what Item 7 excludes](/what-item-7-excludes/) is the list of places to look
instead.

## What to do with a small revision

1. Locate the changed row before quantifying the change. A total that moved
   $4,000 and a row that moved $4,000 are the same fact told at different
   resolutions, and only one of them is usable.
2. Ask what that row pays for. Travel, fees, construction and reserves are four
   different kinds of claim.
3. Read the Item that governs the obligation behind the row — Item 11 for
   training, Item 8 for required purchases, Item 5 for fees — and check whether
   it moved in the same direction and by the same proportion. Here it did not.
4. Check the working-capital row's stated period separately from its dollars.
   Three months and six months are different reserves whatever the figure does.
5. Where nothing material moved, write that sentence down and date it. It is the
   only record that the previous estimate existed, and the previous filing is the
   only place the previous answer is kept.
6. Then leave the revision alone and price the site. The comparison is a check on
   the estimate, and [from Item 7 to a site
   budget](/from-item-7-to-a-site-budget/) is the number a project runs on.

A revision is a small, honest signal about how confident a franchisor is in a
table it has to publish every year. Treated as that, it is worth the hour it
takes. Treated as a measurement of what a restaurant costs, it is a four
thousand dollar number pretending to describe a six hundred thousand dollar
project.

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