Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Pinkberry Franchise Costs (2015 FDD)

by Franchise Chatter on June 14, 2013

in Franchise Costs, Frozen Yogurt Franchises

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Pinkberry Frozen Yogurt Franchise Photo by mezzoblue

This post was updated on June 21, 2015 to reflect information from Pinkberry’s 2015 FDD (Item 7).

Detailed Estimates of Pinkberry Franchise Costs Based on Item 7 (Estimated Initial Investment) of Pinkberry’s 2015 Franchise Disclosure Document

  • All of the figures below are estimates of certain initial start-up expenses for a single Shop. The listed expenses are not exhaustive and Pinkberry cannot guarantee you will not have additional expenses in starting your Shop.
  • In preparing the figures in this chart, Pinkberry relied on its affiliates’ experience constructing and developing Shops in California and its franchisees’ experience in the United States.

1.  Initial License Fee:  $35,000

2.  Architect, Engineer, and Other Design Professionals:  $5,000 – $18,500

3.  Expenses While Training:  $4,800 – $7,200

  • You must arrange and pay for your transportation, meals, and lodging for your Operating Principal, Director of Operations, and your first General Manager (unless your Director of Operations also serves as your first General Manager) while attending the Initial Training Program.
  • These amounts approximate the lodging and meal costs for two to three people for 12 days at $200 per person per day, not including transportation costs.

4.  Acquisition of Real Estate/Deposits and Initial Rent (minimum five year lease):  $9,340 – $23,350

  • The size of a typical site is between 650 and 1,200 square feet. These figures are based on Pinkberry’s experience in over 17 U.S. markets and the assumption that a landlord will require first and last month’s rent and a security deposit.
  • Kiosk spaces range from under 200 square feet plus storage to 450 square feet.

5.  Construction:  $124,100 – $218,000

  • The construction costs generally range from $124,100 to $218,000. The fee range provided is applicable only to interior Shop space, but includes the cost of Pinkberry’s signature “trellis”.

6.  Furnishings:  $4,800 – $15,000

  • Figures for furnishings include tables, chairs, and menu board.

7.  Equipment:  $49,187 – $68,656

  • Figures for equipment include smallwares and required Pinkberry Product machines. These figures do not include Information Systems.

8.  Inventory:  $10,204 – $46,503

  • Figures for inventory assume an opening inventory and replenishment for the first 30 days of operation and include food stuffs, plastic and paper goods, menus, apparel, etc., which may have COD requirements if you do not meet certain criteria.

9.  Utility Deposits and Fees:  $0 – $3,000

  • The figures provided for utility deposits do not include any special connection and/or tap fees, EDD or sales taxes, which are based upon projected sales.

10.  Business License:  $300 – $600

  • You may also have to obtain a license to do business in the city or country where you conduct business; this will depend upon your local ordinances.

11.  Insurance:  $2,000 – $3,000

  • Pinkberry specifies the types and amounts of coverage required under insurance policies and may require different and/or additional kinds of insurance at any time, including excess liability insurance.

12.  Grand Opening:  $3,000 – $10,000

  • You must implement a grand opening marketing plan, spending not less than $10,000 (or $3,000 if the Shop is the second or subsequent Shop opened pursuant to an Area Development Agreement).

13.  On-Site Opening Assistance:  $7,470 – $9,470

  • Figures include Pinkberry’s current training fee of $350 per day for two trainers for up to ten days plus lodging and meals for both trainers, which the company estimates to be approximately $195 per day, per trainer ($295 in New York City), not including the cost of transportation.

14.  Catering/Delivery Service:  $0 – $7,500

  • You may elect, but are not required, to provide catering or delivery services. The suggested list of initial supplies includes plates, insulated containers, dollies, trays, ice packs, totebags, topping bowl, fruit bowl, and table top chiller and currently costs $2,996.40.
  • Additional amounts may be required to obtain a vehicle for providing such services. Pinkberry does not currently have required vehicle specifications.

15.  Information Systems:  $20,991 – $31,533

  • This figure includes costs for two POS System terminals, and associated printers and cash drawers, point-of-sale software, point-of-sale help desk phone support, polling and reporting, food cost and labor system, back-office computer system and Office software, back-office printer, camera and security systems, managed anti-virus software, remote control software, and system and patch management.
  • This figure also includes the cost of an amplifier and the required music subscription services.
  • Pinkberry has not included the cost of any required hardware and software maintenance agreements. This figure also does not include any technical support costs associated with operating the hardware or software.

16.  Telephone:  $150 – $300

17.  Signage:  $7,000 – $32,533

  • Two exterior signs may be required and are included in these figures.

18.  Legal and Accounting:  $2,500 – $10,000

19.  Additional Funds – 3 Months:  $25,000 – $75,000

  • Additional Funds is an estimate of certain funds needed to cover business (not personal) expenses during the first 3 months of operation of your business. You will need capital to support on-going costs of your business, such as payroll, utilities, taxes, loan payments, and other expenses, if revenues do not cover business costs.

20.  Total:  $310,842 – $615,145

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