Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Rocky Mountain Chocolate Factory Franchise Costs (2016 FDD)

by Franchise Chatter on September 30, 2013

in Chocolate Franchise, Franchise Costs, Retail Franchise

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Rocky Mountain Chocolate Factory Photo by princessrica

This post was updated on November 1, 2016 to reflect information from Rocky Mountain Chocolate Factory’s 2016 FDD (Item 7).

Detailed Estimates of Rocky Mountain Chocolate Factory Franchise Costs Based on Item 7 (Estimated Initial Investment) of Rocky Mountain Chocolate Factory’s 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $24,500

2.  Real Estate and Improvements:  $25,000 to $216,935

  • You must purchase or lease retail space that meets the franchisor’s standards and specifications. Real estate costs vary widely from location to location, and the franchisor may not be including all of your real estate expenditures in these estimates.
  • The franchisor may require you to hire a professional to negotiate the lease for your Franchised Location and you must pay the professional’s fees, or you may hire your own professional provided that certain provisions the franchisor requires are included in the lease. The franchisor has included an estimated amount for these fees in the high number.
  • Space requirements for full-sized Stores average approximately 1,000 total square feet with 650 retail square feet, but the exact size will result in cost variances to you.
  • Your costs to improve the Franchised Location will depend in part on whether your space is completely constructed, or is the remodel of an existing space. It will also depend on the size of the space, the overall costs in the market, and the type of retail environment in which the Store is located.
  • The franchisor assists you in determining which of the two different full-sized Store configurations will suit your Franchised Location.
  • You must hire an architect to design your Store layout according to the company’s specifications and submit a plan to the franchisor for approval. Architect fees depend on the condition of the space, its location, and local permitting requirements.
  • If your Store is in a major mall or Triple A location, the landlord will usually not pay for any of your tenant improvements, resulting in higher construction costs to you. The condition of previously occupied sites varies greatly and the amount of usable space also varies greatly.

3.  Furniture and Fixtures:  $11,000 to $32,000

4.  Equipment:  $22,800 to $78,000

5.  Signs:  $2,500 to $14,320

  • Items 3, 4, and 5 include the estimated costs to equip your Store with storage cabinets, display cabinets, cooking equipment, storage fixtures, signs, refrigeration equipment, and a point of sale computerized cash register system (“POS System”)  that includes PC-based registers, cash drawers, thermal receipt printers, scales, credit card authorization software, credit card readers, and laser bar code scanners.

6.  Opening Inventory and Cooking Supplies Purchased from the Franchisor:  $13,000 to $29,000

7.  Opening Inventory and Cooking Supplies Purchased from Other Suppliers:  $4,500 to $9,000

  • Because Stores vary in size, the franchisor does not have an opening inventory requirement. You must maintain a minimum inventory of no less than 1,000 pounds of Factory Candy at all times. In addition, you need cooking supplies including chocolate, sugar, glucose, nuts, butter, evaporated milk, fresh and preserved fruit, flavorings, and other items.

8.  In-Store Promotional Graphics:  $1,500 to $7,000

  • The franchisor’s designated supplier will provide you with promotional graphics for the walls of your Store, which are tailored to different seasons of the year. You will alternate these graphics depending on the season or time of year.

9.  Security Deposits, Utility Deposits, Business Licenses:  $300 to $7,000

  • Security deposits range from $0 to two months’ rent; utility deposits range from $0 to approximately $1,500; and business licenses range from approximately $50 to $550, depending on your location.

10.  Pre-Opening Training, Travel, and Living Expenses:  $500 to $5,900

  • Your travel and living expenses when you attend the initial training program vary depending on the length of your instruction, the distance you must travel, and the standard of living you desire while you attend the program.

11.  Additional Funds – 3 Months:  $10,000 to $75,720

  • This estimates your pre-operational expenses, which are not listed above, as well as additional funds necessary for the first three months of your business operations. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses when you start the business.

12.  Total Estimated Initial Investment for a Full-Sized Store:  $115,600 to $499,375

  • The franchisor relied on its 32 years of experience in the industry and on information voluntarily reported by franchisees when it prepared these figures, but it has not made any independent verification of the information reported by franchisees.

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