Updated January 6, 2020.
Detailed Estimates of Menchie’s Franchise Costs Based on Item 7 (Estimated Initial Investment) of Menchie’s 2019 Franchise Disclosure Document
- This estimate is based on obtaining used equipment.
1. Initial Franchise Fee: $40,000
- If you sign an Area Development Agreement, the Initial Franchise Fee you will pay will depend on the number of Stores you agree to open. If you agree to open three Stores, your Initial Franchise Fee will be $32,000 for each Store. If you agree to open five Stores, your Initial Franchise Fee will be $25,000 for each Store.
2. Travel and Living Expenses While Training: $500 to $3,500
- Menchie’s will not charge you a fee for you and one additional person to attend the initial training program. You, however, are responsible for all hotel, transportation, and other costs and expenses for the people you designate to attend the initial training program.
- The amount above represents the estimated costs and expenses you will incur for you and one additional person to attend the initial training program.
3. Lease Deposit and Rent: $3,397 to $5,630
- A Menchie’s Store occupies 900 to 1,700 square feet of space. Stores can be located in strip shopping centers, shopping malls, free-standing units, and other venues in downtown commercial areas and in residential areas.
- Rent depends on geographic location, size, local rental rates, businesses in the area, site profile, and other factors, and could be considerably higher in large metropolitan areas than in more suburban or small town areas.
- Menchie’s anticipates that you will rent the premises. It is possible, however, that you will choose to buy, rather than rent, real estate on which a building suitable for the Store already is constructed or could be constructed.
- The rental security deposit may be refundable depending on your agreement with your landlord.
4. Leasehold Improvements: $90,166 to $154,117
- Leasehold improvement costs, including floor coverings, wall treatments, counters, ceilings, painting, window coverings, electrical, carpentry and similar work, and architect’s and contractor’s fees depend on the site’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; the build-out required to conform the site for your Store; and any construction or other allowances the landlord grants.
- The lower figure assumes that you will locate the Store in a Special Site; the higher figure assumes a high square footage model.
- These monies are not refundable after they have been expended.
- The estimates included above reflect the average deduction provided by landlords for tenant improvements and other allowances.
5. Furniture, Fixtures, and Equipment: $49,775 to $91,696
- These amounts include the frozen yogurt-making machines that you must purchase from Menchie’s required supplier. These amounts also include the cost for refrigerators, freezers, and other equipment, such as office equipment and furniture and a telephone system.
- The range of costs assumes that you will purchase used equipment.
- The low end costs shown are for used furniture, fixtures, and equipment in a Store located in a Special Site, and the high end costs are for new furniture, fixtures, and equipment in a Store not located in a Special Site.
- The cost is turnkey, including installation.
6. Computer (POS) System: $1,068 to $2,500
7. Signage: $3,170 to $13,756
- The low end assumes this is signage for a Store in a Special Site.
8. Opening Inventory: $5,000 to $7,047
- This includes food and beverage products, paper products, cleaning supplies, printing, uniforms, promotional material, and other supplies you will need in order to open your Store.
9. Uniforms, Merchandise, Equipment, and Supplies: $800 to $1,000
10. Grand Opening Marketing: $5,000 to $7,500
- This represents the monies to be included in initial marketing for the first 14 days of operation. This includes funds to be used for your “Grand Opening Marketing Campaign.”
- Amounts spent on your Grand Opening Marketing will count toward your first year’s local advertising requirements.
11. Utility Deposits, Professional Fees, Business Licenses, etc.: $350 to $4,000
12. Insurance (3 Months): $1,200 to $1,500
- These amounts represent 25% of the annual premium for the required insurance. Many insurance companies will require you to pay this amount prior to opening and allow you to pay the remainder in monthly payments throughout the year.
- The type of insurance you are required to maintain is described in Item 8 of the FDD.
- Typically, the annual premiums will range from $4,800 to $6,000 per year.
13. Inspection Fee: $0 to $1,500
- Menchie’s will inspect your Store prior to opening. If your Store does not pass initial inspection, you will be charged for all costs and expenses Menchie’s incurs in conducting any subsequent inspection, which amount will not exceed $1,500.
14. Additional Funds (3 Months): $6,000 to $36,000
- This item estimates your expenses during the initial period (first 3 months) of operation of your Menchie’s Store (other than the items separately identified in the table).
- This estimate includes payroll costs but not the cost of an owner’s draw or salary.
- These figures are estimates and Menchie’s cannot guarantee that you will not have additional expenses starting the business.
15. Total: $206,426 to $369,746
- These figures were based on information provided by Menchie’s franchisees dating back to 2008 and the expenses may differ in other parts of the country.