(Ambrosio’s note: Welcome to FDD Talk 2.0, a more comprehensive version of our flagship content, featuring not only the Item 19 financial performance representations of select franchises, but their estimated initial investment, unit growth, and other key items of their 2012 FDD as well.)
Highlights of Smashburger’s 2012 Franchise Disclosure Document – Part 1
Estimated Initial Investment for a Smashburger Restaurant
1. Initial Franchise Fee: $40,000
- The initial franchise fee is non-refundable under the terms of the Franchise Agreement.
2. Leasehold Improvements: $100,000 – $325,000
- The estimate for leasehold improvements does not include any tenant improvement allowance that may be granted by landlords towards leasehold improvements. Tenant improvement allowances are site specific and dependent upon several variables, including rent, occupancy levels, and local market conditions, which are beyond Smashburger’s control.
3. Furniture, Fixtures, and Equipment: $100,000 – $180,000
- This estimate includes freight, installation, and applicable state and local taxes.
4. Signage: $8,000 – $20,000
5. IT, POS System: $15,000 – $30,000
6. Three Month’s Rent: $6,000 – $33,000
- The cost of acquiring or leasing a location for your restaurant will vary significantly depending upon the market in which the proposed site is located. A suitable building for a free standing restaurant will range in size from approximately 1,600 square feet to 2,200 square feet, and will likely cost from $15 to $60 per square foot per year.
- Lease agreements vary but usually require the lessee to pay for maintenance, insurance, taxes, and any other charges or expenses for the land and building and the operation of the restaurant, or they may require that the lessee reimburse the lessor for its proportionate share of these payments (plus interest) made on behalf of the lessee, and pay minimum monthly rent or percentage rent.
- Smashburger reserves the right to approve your lease.