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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Robeks Franchise Costs (2016 FDD)

by Franchise Chatter on September 24, 2013

in Franchise Costs, Smoothie Franchise

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Robeks Fruit Smoothies and Healthy Eats Store by maxfisher

This post was updated on May 11, 2016 to reflect information from Robeks’ 2016 FDD (Item 7).

Detailed Estimates of Robeks Franchise Costs Based on Item 7 (Estimated Initial Investment) of Robeks’ 2016 Franchise Disclosure Document

  • The low/high range for store initial investment costs largely depends on the size of your Store, prior use, and overall condition. These expenses assume you locate in an outdoor strip shopping center.
  • The franchisor bases the low range on an 800 square foot store and the high range on a 1,200 square foot store. The low range assumes the condition of the store requires minimal improvements to renovate it to the company’s requirements for a Robeks Store. The low and high ranges assume that construction, labor, and materials are competitively priced.

1.  Initial Franchise Fee:  $25,000

  • If you sign an Area Development Agreement, you will also have to pay an Area Development Fee (minimum of $20,000).

2.  Leasehold Improvements:  $90,000 to $124,000

  • Leasehold improvements include costs to conform the approved location to the company’s comprehensive specifications for lighting, flooring, wall coverings, ceiling treatments, retail displays, storefront design and build-out, building and health permits, general trade dress components, and other improvements to prepare the Store for opening.
  • Actual costs will depend on the size and pre-existing condition of the approved location. These estimates assume no structural, storefront, or exterior renovations, and a competitive environment where multiple contractors bid the leasehold improvements using the best available labor and material pricing in the local market.
  • These estimates also assume that the leasehold premises are delivered in “Vanilla Shell” condition, meaning that the landlord provides most base building interior improvements such as mechanical systems, utility lines and equipment, some ceiling and lighting improvements, electrical outlets, drywall finish, and restrooms, or a credit to tenant for the same.
  • Actual costs may be lower if the landlord provides over-standard improvements or contributes any additional tenant improvement allowance.

3.  Equipment:  $62,000 to $83,800

  • Equipment includes walk-in, reach-in, and under-counter refrigeration and freezers as needed, smoothie-making equipment, juicing machines, shelving sinks, small wares, and other items needed to operate a standard Robeks Store.
  • All equipment must be new, not used, unless otherwise approved by the franchisor in writing.
  • The chart assumes that you purchase, rather than lease, all equipment. However, your initial expenses may be lower if you lease or finance equipment.

4.  Fixtures:  $14,000 to $23,000

  • Fixtures include all custom-made millwork, including retail displays, cabinetry, custom stainless steel fixtures, menu boards, wall graphics, and interior or exterior seating or furnishings as allowed by the lease or municipality.

5.  Signs:  $5,000 to $8,500

  • The estimated cost of signs assumes one internally-lit building sign and one internally-lit medallion window sign per Store.

6.  Computer System (includes POS system, networking, and software) and Retail Radio:  $7,500 to $10,000

7.  Professional Fees:  $6,500 to $13,000

  • Professional fees include fees for services of professionals such as architects and lawyers, and assume a single fee basis (as opposed to a per hour basis) with no extraordinary circumstances.
  • You may use an architect of your choice to prepare the initial floor plan if the architect is approved by the franchisor in writing.
  • Some franchisees have chosen not to use an attorney; thus, the low end of the range does not include attorney’s fees. The franchisor recommends that you use an attorney who specializes in retail real estate.

8.  Security Deposits, Utility Deposits, and Business Licenses:  $4,500 to $8,500

  • Some vendors, utility companies, and the landlord of your premises may require you to pay a security deposit. Landlords vary in whether they require a security deposit and in the amount they charge. The lease security deposit assumes no more than 1 month of base rent.
  • These amounts do not include common area maintenance, real estate taxes, and insurance paid to landlord as triple-net costs.

9.  Real Estate Costs:  $3,500 to $7,000

  • You will need to lease suitable retail space. In consenting to a site, the franchisor considers a variety of economic, demographic, and geographic factors, including visibility, access, and proximity to substantial daytime traffic, both pedestrian and vehicular.
  • The real estate category is based on rent ranging from a low of $3,500/month to a high of $7,000/month, not including common area maintenance (CAM) charges or any other location-specific costs. Rent also excludes directly billed utility costs during this period, which the franchisor includes under the miscellaneous category.
  • These estimates are for traditional sites and do not include captive-audience type locations such as malls, airports, college campuses, or free-standing structures or spaces with drive-thru capabilities, etc.

10.  Opening Inventory:  $6,000 to $8,000

  • Opening inventory estimates include a sufficient supply of Robeks Nutritional Boosts and other Proprietary Products, produce, beverages, ingredients, dry goods, food and nutritional items, and other products sold in Robeks Stores for both in-store production and product sales to customers.

11.  Grand Opening Advertising:  $7,500

  • Within the period of time from 30 days before opening, through 60 days after opening your Store, you must spend at least $7,500 on grand opening advertising and promotion, but may choose to spend more.
  • You must submit written evidence of such expenditures to the franchisor. The franchisor will collect by ACH the difference, if any, between the required amount to be spent and the amount verified by your documentation. The franchisor will begin collecting the difference 90 days after your Store opens in equal installments over a six month period. These funds will be deposited in the Marketing Fund.
  • The franchisor may have different requirements for Non-Traditional Venues, C0-Branded Locations, and Drive-Thru Locations.

12.  Travel for Training:  $1,500 to $3,500

13.  Miscellaneous and Additional Funds (for first 3 months of operations):  $10,000 to $15,000

  • Miscellaneous covers initial expenses not covered elsewhere in the chart, such as for initial office supplies, business management software costs, and other miscellaneous items. The amount covers a period of 3 months. The Additional Funds category includes an allowance for payroll expenses for all opening employees, but does not include any allowance for a draw or salary to you or other owners of the franchise.

14.  Total:  $243,000 to $336,800

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