This post was updated on June 13, 2016 to reflect information from Charleys Philly Steaks’ 2016 FDD (Item 7).
Detailed Estimates of Charleys Philly Steaks Franchise Costs Based on Item 7 (Estimated Initial Investment) of Charleys’ 2016 Franchise Disclosure Document
- Except as otherwise noted, none of these payments are refundable. The cost estimates are approximate amounts for a Restaurant; your actual costs may vary.
- The franchisor does not offer financing for your initial investment. The availability and terms of financing with third party lenders will depend on factors such as the availability of financing generally, your creditworthiness, and policies of lending institutions concerning the type of business to be operated.
1. Initial Franchise Fee: $24,500
- The initial franchise fee is $15,000 for your second and any subsequent Charleys Restaurant.
2. Leasehold Improvements: $50,000 to $250,000
- Your costs for leasehold improvements will depend on many varying factors such as the type of location (e.g. strip center, mall food court, institutional), the size and condition of the premises of your Restaurant, and other local factors, including labor and material costs.
3. Equipment/Furniture/Fixtures: $44,700 to $106,313
- You must purchase or lease certain items of equipment; including, but not limited to, signs, display cases, fryers, grills, air conditioning and exhaust units, sinks, coolers, freezers, office equipment shelving, counters, banners, awnings, product photos, and pictures.
- You are responsible for shipping and handling costs.
4. POS System: $5,150 to $13,220
- You must purchase a point of sale system from one of the company’s approved suppliers before you open your Restaurant. You must also use one of the company’s approved vendors to install your POS System for the Restaurant.
- The estimate is dependent on how many terminals and kitchen displays your Restaurant may require. Currently, most franchisees use two POS systems.
5. Signage: $5,000 to $12,000
- You must purchase approved signage for the Restaurant from one of the company’s approved suppliers.
6. Architect: $5,000 to $15,890
- You must use one of the company’s approved architects for the planning and design of your Restaurant.
7. Travel and Living Expenses Associated With Initial Training: $4,000 to $6,000
- The company provides instructors and instructional materials for the initial training in Columbus, Ohio, but you will need to arrange for transportation, lodging, and any wages for the attendees.
- At least two persons must attend, and the cost will depend on the distance the attendees must travel and the type of accommodations chosen.
8. Insurance Deposits: $3,500 to $10,000
- You must obtain commercial general liability insurance as well as property casualty insurance, workers’ compensation and employer’s liability, and any other coverage that is required in your lease.
9. Miscellaneous Deposits: $1,000 to $8,000
- The franchisor estimates that you will have to pay deposits on such items as utilities, phones, your lease, and legal and/or accounting fees.
10. Additional Funds (3 month period): $20,000 to $30,000
- These figures are estimates and include initial supplies of products for initial start-up and working capital, payroll costs, and other additional funds for the first 3 months of operation.
- You will need to have on hand sufficient capital to cover salaries for 10-25 employees, some of whom will be part-time.
- The franchisor cannot guarantee that you will not have additional expenses. You must be prepared to reorder supplies as necessary and to cover the cost of utility bills.
11. Totals: $162,850 to $475,923
- Real Estate. The chart above provides an estimate of your initial investment to develop a Charleys Restaurant on a leased strip center, mall food court, airport, or institutional site. The chart does not include the initial investment expenditures that would be involved in developing a Charleys Restaurant at a freestanding location and the company is not currently offering franchises for such locations.
- The cost per square foot to lease commercial space varies considerably depending on the location and market conditions affecting commercial property.
- In 2015, the square footage for company-owned mall food court locations ranged from 472 to 1,643 square feet. The company estimates that franchisees will need approximately 400 to 900 square feet for a mall food court location and 1,200 to 2,500 square feet for a strip center or in-line Restaurant with seating.
- In 2015, rents for company-owned Restaurants in mall food court locations ranged from $65.34 to $632.56 per square foot.
- All or a portion of the rental rate for some of the company-owned Restaurants is based on a percentage of sales, so the cost per square foot for these particular restaurants varies from time to time.