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Franchise Costs 2013: Detailed Estimates of Paciugo Gelato Franchise Costs (2013 FDD)

by Franchise Chatter on September 10, 2013

in Franchise Costs, Frozen Dessert Franchise



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Detailed Estimates of Paciugo Gelato Franchise Costs Based on Item 7 (Estimated Initial Investment) of Paciugo Gelato’s 2013 Franchise Disclosure Document

  • The franchise is for a retail outlet which makes and sells gelato and other specialty food items, beverage items, and products. There are 4 types of units available — a Traditional unit, Non-Traditional unit, Mall Kiosk unit, and Mall In-Line unit.

1.  Franchise Fee

  • Traditional Unit:  $30,000
  • Mall Kiosk Unit:  $30,000
  • Mall In-Line Unit:  $30,000
  • Non-Traditional Unit:  $30,000
  • The initial franchise fee is non-refundable.

Paciugo Gelato Photo by Bridging Culture Worldwide2.  Real Estate Fee

  • Traditional Unit:  $0
  • Mall Kiosk Unit:  $0 to $7,500
  • Mall In-Line Unit:  $0 to $7,500
  • Non-Traditional Unit:  $0
  • For locations in malls and regional shopping centers, the franchisor will direct the search process and assist you in evaluating the location before assisting you in the negotiation of basic business terms, for which you will pay the franchisor the Real Estate Fee when you sign the lease for your unit.
  • The franchisor’s assistance with your search process and evaluation of potential sites is limited to identifying sites that meet the franchisor’s minimum site selection guidelines. You will make the final decision about where to locate your unit based on your own evaluation of potential sites. The franchisor’s assistance and acceptance of a site you choose does not constitute a representation or warranty that the proposed site will be a profitable location for your unit.

3.  Rent

  • Traditional Unit:  $2,000 to $10,000
  • Mall Kiosk Unit:  $2,000 to $10,000
  • Mall In-Line Unit:  $2,000 to $10,000
  • Non-Traditional Unit:  $0 to $8,000
  • The franchisor estimates that a typical Traditional unit (which may include, for example, street locations, in-line lifestyle shopping center locations, or other retail locations) will need from 800 to 1,200 square feet of floor space.
  • The franchisor estimates that a typical Mall Kiosk unit will need from 200 to 300 square feet of floor space, and approximately 200 square feet for additional storage.
  • The franchisor estimates that a typical Mall In-Line unit will need from 300 to 700 square feet of floor space, and may or may not require 200 square feet of additional storage.
  • The franchisor estimates that a typical Non-Traditional unit will need from 200 to 800 square feet of floor space.
  • It is not possible for the franchisor to estimate your rent expenses with much certainty due to the material differences in these costs from location to location, and because some institutional landlords may charge a variable rent based on a percentage of your sales, with or without a fixed minimum rental charge. You should investigate rents in your area.

4.  Design Cost

  • Traditional Unit:  $2,600 to $6,300
  • Mall Kiosk Unit:  $2,600 to $4,300
  • Mall In-Line Unit:  $2,600 to $4,300
  • Non-Traditional Unit:  $2,600 to $4,300
  • This estimate is for the approved architecture firm the franchisor designates to perform the following services:  Test Fit Planning and Design Development. You may then provide this information to another architect of your choice (subject to the franchisor’s approval) to complete the construction documents, or you may have the franchisor’s designated architect complete the construction documents for an additional fee.
  • The additional fee for the construction documents is included in the Leasehold Improvements expenses.

5.  Leasehold Improvements



  • Traditional Unit:  $60,000 to $160,000
  • Mall Kiosk Unit:  $50,000 to $70,000
  • Mall In-Line Unit:  $70,000 to $100,000
  • Non-Traditional Unit:  $20,000 to $100,000
  • Leasehold improvements involve expenses associated with the design and build out of the unit, such as additional architecture services; and plumbing, electrical, and remodeling work. You may be able to negotiate with your landlord for a landlord contribution for these expenses.
  • The considerable spread from minimum to maximum is due to factors such as unit size and type, configuration, existing conditions of the locations, and local labor prices. The estimate shown does not reflect any landlord contribution.
  • The contractor must be approved by the franchisor in advance of beginning work.

6.  Equipment

  • Traditional Unit:  $80,000 to $90,000
  • Mall Kiosk Unit:  $80,000 to $90,000
  • Mall In-Line Unit:  $80,000 to $90,000
  • Non-Traditional Unit:  $30,000 to $90,000
  • The estimates are for the equipment you will need to open a unit. All of these items are available for purchase from the approved suppliers.

7.  Decor

  • Traditional Unit:  $20,000 to $50,000
  • Mall Kiosk Unit:  $0 to $10,000
  • Mall In-Line Unit:  $0 to $10,000
  • Non-Traditional Unit:  $0 to $10,000
  • The estimates are for the decor items (including furnishings and fixtures) you will need to open a unit. All of these items are available for purchase from approved suppliers. You may not deviate from Paciugo’s System Standards relating to the appearance and other aesthetics of your unit, unless you have the franchisor’s prior express written consent.

8.  Signs

  • Traditional Unit:  $12,000 to $25,000
  • Mall Kiosk Unit:  $12,000 to $15,000
  • Mall In-Line Unit:  $12,000 to $15,000
  • Non-Traditional Unit:  $5,000 to $15,000
  • The estimates are for the interior and exterior signs you will need to open a unit. These signs are available for purchase from approved suppliers.

9.  Opening Inventory and Supplies

  • Traditional Unit:  $8,000 to $10,000
  • Mall Kiosk Unit:  $8,000 to $10,000
  • Mall In-Line Unit:  $8,000 to $10,000
  • Non-Traditional Unit:  $5,000 to $8,000
  • The estimates are for opening inventory and supplies, which are available for purchase from Paciugo Supply.

10.  Installation

  • Traditional Unit:  $3,000 to $6,000
  • Mall Kiosk Unit:  $3,000 to $6,000
  • Mall In-Line Unit:  $3,000 to $6,000
  • Non-Traditional Unit:  $1,000 to $5,000
  • The estimates are for the costs of installing the equipment. Approved suppliers will provide these installation services.

11.  Computer System

  • Traditional Unit:  $4,000 to $12,000
  • Mall Kiosk Unit:  $4,000 to $12,000
  • Mall In-Line Unit:  $4,000 to $12,000
  • Non-Traditional Unit:  $4,000 to $12,000
  • Includes purchase of point-of-sale system, separate office computer, accessories, and installation.

12.  Training Expenses

  • Traditional Unit:  $500 to $4,000
  • Mall Kiosk Unit:  $500 to $4,000
  • Mall In-Line Unit:  $500 to $4,000
  • Non-Traditional Unit:  $500 to $4,000
  • The estimates include costs for the attendance of 1 trainee. Travel expenses vary substantially depending on method of travel, point of origin, distance, advance purchase requirements, and other factors.
  • The low estimate is for a franchisee within daily driving distance of Dallas, Texas. The high estimate includes amounts for airfare, hotel, rental car, and meals.
  • These estimates do not include any salary or wages/benefits you may pay to any of your trainees for the time they spend in training.

13.  Grand Opening Costs

  • Traditional Unit:  $8,000
  • Mall Kiosk Unit:  $8,000
  • Mall In-Line Unit:  $8,000
  • Non-Traditional Unit:  $8,000
  • On or before the date on which you sign the lease for your Franchised Business, you must pay this amount in one lump sum payment to the franchisor’s designated or approved vendors for the costs of designing a grand opening marketing plan, printing and mailing grand opening announcements, opening discounts, media/print ads, and free product giveaways in connection with your grand opening celebration.

14.  Miscellaneous Opening Costs

  • Traditional Unit:  $1,200 to $4,000
  • Mall Kiosk Unit:  $0 to $1,000
  • Mall In-Line Unit:  $1,200 to $4,000
  • Non-Traditional Unit:  $0 to $1,000
  • Includes utility costs and deposits, security deposits, insurance premiums, and business licenses and permits.

15.  Additional Funds for First 3 Months



  • Traditional Unit:  $0 to $20,000
  • Mall Kiosk Unit:  $0 to $20,000
  • Mall In-Line Unit:  $0 to $20,000
  • Non-Traditional Unit:  $0
  • You will need capital to support on-going expenses, such as payroll, insurance premiums, taxes, bonds, initial accounting services, overhead, and other miscellaneous expenses, to the extent these expenses may exceed your sales revenue.
  • This amount is an estimate, and it does not include any debt service payments.
  • The franchisor relied on its experience and Authentic Gelato’s experience since 2000 in estimating your needs for additional funds.

16.  Total

  • Traditional Unit:  $231,300 to $435,300
  • Mall Kiosk Unit:  $200,100 to $297,800
  • Mall In-Line Unit:  $221,300 to $330,800
  • Non-Traditional Unit:  $76,100 to $295,300


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