This post was updated on April 24, 2017 to reflect information from TCBY’s 2017 FDD (Item 7).
Detailed Estimates of TCBY Franchise Costs Based on Item 7 (Estimated Initial Investment) of TCBY’s 2017 Franchise Disclosure Document
For a TCBY Store
1. Initial Franchise Fee: $35,000
2. Travel and Living Expenses While Training: $2,000 to $3,000
- You are responsible for any incidental expenses that you and your personnel incur while attending TCBY’s initial training program, including car rental, gas, airline tickets, meals, hotel room, entertainment, salaries, and benefits.
3. Real Estate Lease: Amount Not Specified
- If you do not currently own adequate space, you must lease the space for your Store. Typical locations are shopping malls, strip shopping centers, lifestyle centers, free-standing buildings, and non-traditional venues such as student unions on university campuses and similar venues.
- The average Store size ranges from 600 to 900 square feet. The average size of a Kiosk is typically smaller than 600 to 900 square feet, but may vary widely.
- You will make rental payments to the landlord, and TCBY cannot estimate the amount of your monthly rental payments since they vary greatly from site to site and are affected by a number of factors, including location, size, visibility, accessibility, and competitive market conditions.
- In addition to rental payments, your lease may require other payments to the landlord, such as payments for shopping center or building operating expenses, common area maintenance expenses, food court expenses, merchants’ association assessments, assessment for shopping center promotion and advertising, and the like.
- Your lease may also require you to spend a certain amount on advertising and promotion for your Store.
- Because these payments vary widely from lease to lease, TCBY cannot estimate the amount you may be required to pay for these or other similar items.
4. Improvements and Equipment: $249,340 to $542,812
- These estimates include construction costs (labor and material) for typical tenant improvements and remodeling to prepare a site for operation of a TCBY Store or Kiosk, as well as estimated costs for necessary trade fixtures, such as display cases, signage, counters, and work tables; equipment, such as refrigerators, beverage dispensers, and dispensing equipment; smallwares; and cash registers.
- At select Stores, TCBY may permit the build-out of drive-through services, and the estimates in Item 7 include the costs to build a drive-through at Stores.
- The estimates also include construction management costs, general conditions, builder’s risk/liability insurance, and financing costs.
- If you develop a new store, TCBY will provide you with prototypical plans and specifications at no additional cost to you, but you must also employ and pay an architect or engineer to prepare a site plan and other construction documents to adapt these plans and specifications to city, state, and local building codes and to the specific site chosen for your Store.
- TCBY has the right to require you to use a commercial contractor and architect that it approves.
- These estimates do not include lease costs.
- Your actual construction costs will depend on numerous factors, such as the condition of the premises, duration of the building process (delays), union labor requirements, contractors’ fees, signage, availability of materials and equipment, interest rates, and the insurance coverage you choose.
- A modular, prefabricated store is a free-standing Store that is operated within a mall, shopping center, or other site, but is not a permanent, in-line structure. It is, however, usually operated under a long-term lease.
- The modular unit is assembled using prefabricated components built off-site, often at a savings over traditional construction methods. It is typically most appropriate for high-traffic center court or corridors within larger metropolitan malls.
- If you find a site that TCBY approves for installation of this type of unit, you must purchase components from a vendor or vendors TCBY designates.
5. Opening Product and Soft Goods Inventory: $1,500 to $10,000
- This estimate includes supplies; opening inventory; accounting forms and systems; soft goods, such as napkins, cups, and other paper goods; utensils; packaging materials; and other required items. The costs will vary depending upon your inventory levels and storage space.
6. Grand Opening Promotion (if opening a new store): $5,000 to $10,000
- If you are developing a new Store or Kiosk, you must spend between $5,000 and $10,000 on a grand opening advertising and promotional program, a portion of which may be paid to TCBY or an affiliate to cover the cost of materials that it or an affiliate may provide to you for the grand opening.
- You may also incur expenses from other vendors and suppliers in conducting your grand opening promotion.
- TCBY may require you to submit a grand opening plan containing details about your planned grand opening promotion, and obtain its approval of the plan before the event.
7. Security Deposits, Utility Deposits, Business Licenses, and Other Deposits and Prepaid Expenses: $4,000 to $5,000
- You may be required to pay a security deposit under your real estate lease and other deposits for utilities and insurance premiums.
- Lease security deposits are typically due upon signing and can potentially be refundable if you do not default on your lease. Your lease may also require you to pay the last month’s rent in advance.
- Deposits for utility services are typically required at the time the service is applied for, and may or may not be refundable.
- The amount for licenses and permits can vary significantly, and you should verify specific amounts with local authorities.
8. Professional Fees: $9,000 to $10,000
- You may find it necessary to retain an attorney to review the real estate lease or sublease, the franchise documents, or to assist in forming a corporation, partnership, or limited liability company. You may also retain an accountant for advice in establishing and operating your franchise business and filing necessary tax forms and returns.
9. Insurance (3 Months): $2,500 to $3,500
- You must obtain and maintain certain types and amounts of insurance.
- Insurance costs depend on policy limits, types of policies, nature and value of physical assets, Gross Revenues, number of employees, wages paid, square footage, location, business contents, and other factors bearing on risk exposure.
- Insurance providers may require an annual payment, semi-annual installments, or monthly installments. This estimate contemplates monthly installments for 3 months.
- These estimates also include workers’ compensation insurance, which are based on wages, which will vary from state to state. You should review the rates in the state in which you are opening the Store for an estimate of the premium you will be required to pay.
10. Computer Hardware and Software: $3,500 to $4,500
- In addition to the initial cost above, you must pay to TCBY’s designated supplier monthly maintenance and subscriber fees related to your computer system.
- TCBY also currently requires that you have Internet access in your Store Premises, which will cost approximately $150 for installation and $600 per year or more for a subscription.
- This estimate also includes costs to acquire and implement the necessary hardware and software to operate a drive-through window, which TCBY may permit at designated locations.
11. Additional Funds (3 Months): $8,000 to $12,000
- This amount represents the range of your initial start-up expenses over the first 3 months of operation. These figures include estimated payroll costs. However, they do not include the salary for the store manager, on the assumption that you will manage the Store.
- The figures also do not include inventory.
12. Totals: $319,840 to $635,812
For a TCBY Kiosk
- The total estimated initial investment necessary to begin operation of a TCBY Kiosk ranges from $173,950 to $259,687.
For a TCBY Vending Machine
- The total estimated initial investment necessary to begin operation of a TCBY vending machine ranges from $37,925 to $43,625.