Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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  • Massage Envy
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  • Planet Fitness
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  • And Hundreds More...

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Franchise Costs: Detailed Estimates of Which Wich Franchise Costs (2017 FDD)

by Franchise Chatter on October 7, 2013

in Franchise Costs, Sandwich Franchise

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Which Wich Superior Sandwiches Photo

This post was updated on June 25, 2017 to reflect information from Which Wich’s 2017 FDD (Item 7).

Detailed Estimates of Which Wich Franchise Costs Based on Item 7 (Estimated Initial Investment) of Which Wich’s 2017 Franchise Disclosure Document

Development Agreement

1.  Initial Franchise Fee:  $42,500 ($30,000 for Store 1; $12,500 deposit for Store 2)

  • If the franchisor grants you the right to develop five Stores under a Development Agreement that includes limited territory protection, the modified development fee is $130,000, which increases your estimated initial investment range to $282,500 to $576,250.

2.  Initial Application and Document Preparation Fee:  $750

  • When the franchisor approves your application to develop your first two Stores, you will pay the franchisor $750 (consisting of a $500 application fee plus a $250 document preparation fee for Store 1) and reimburse it any additional out-of-pocket attorneys’ fees that it incurs in connection with awarding you a franchise.
  • At the time the franchisor prepares the Franchise Agreement for Store 2 or any additional Franchise Agreements for you, you will pay the franchisor $250 to prepare each Franchise Agreement and $250 for any amendment agreement that may be required.

3.  Site Selection Assistance:  $0 to $1,000

  • The high figure assumes that two additional site visits are required. Additionally, you will have to pay the franchisor’s costs of transportation, lodging, and meals.

4.  First Month’s Rent and Security Deposit:  $2,000 to $14,000

5.  Leasehold Improvements:  $35,000 to $200,000

  • This estimate is based on the franchisor’s affiliates’ and franchisees’ experience in renovating an existing building for a Which Wich Store. Which Wich Stores are typically located in commercially zoned shopping or entertainment areas.
  • Due to the cost of land acquisition and new construction, the premises for Which Wich Stores are normally leased. These amounts assume that you will lease the premises for the Store and do not include costs of land acquisition and construction of a building.
  • The leasehold improvements estimate is based on the cost of adapting the prototypical architectural design and plans (including architect fees) to a facility containing approximately 500 to 3,000 square feet.
  • The low figure assumes that you will be converting an existing take-out Store to a Which Wich Store. The high figure assumes that you will be a first generation tenant and that you will be responsible for providing connections to adequate electrical, gas, water, and sewage services. The high figure also assumes that the landlord will be providing a $75,000 allowance for tenant improvements.
  • Your actual costs for leasehold improvements will also be affected by various other factors like the location of the Store, local market conditions, and whether or not union fees are imposed upon construction costs.
  • Your actual costs may or may not include site preparation and finish-out costs, depending on the arrangements you negotiate with your landlord. These estimates may vary substantially based on your ability to negotiate with your landlord and your financial strength, as well as on local commercial leasing and labor rates and other local conditions.

6.  Store Design Consulting Services:  $500 to $1,500

  • The minimum includes consultation with no site visits. The maximum includes a site visit by the consultant, plus you may have to pay the consultant’s additional out-of-pocket expenses.

7.  Furniture, Fixtures, and Signage:  $87,500 to $125,000

  • These amounts include the cost of furniture, fixtures, equipment, smallwares, decor items, interior graphics, sound system, and signage required for your Which Wich Store.

8.  Initial Training Costs:  $4,500 to $15,000

  • The franchisor provides initial training to your Operating Principal and District Manager or Store Supervisor (up to two people total) at no additional charge. The figures in the chart represent your estimated training-related, out-of-pocket costs to send these individuals to the company’s training program; wages are not included.
  • You must pay all expenses you or your employees incur in the initial training program, like travel, lodging, meals, and wages. These costs will vary depending upon a variety of factors including salaries, wage rates, choice of hotels and dining facilities, and airfare or other transportation costs.
  • The low figure assumes that all trainees are owner/operators who draw no salary and who reside in the Dallas/Fort Worth Metroplex.

9.  Pre-Opening Consultation:  $0 to $1,000

  • The low figure assumes no on-site pre-opening assistance visits; the high figure assumes two pre-opening, on-site consultation visits. Additionally, you will have to pay the franchisor’s costs of transportation, lodging, and meals.

10.  Opening Assistance Costs:  $5,000 to $7,500

  • For your first Store, the franchisor provides on-site opening assistance for 10 days for a flat Opening Assistance Fee of $5,000. For your second and each additional Store, at your request, or if the franchisor deems it necessary, the franchisor will provide additional on-site opening assistance, subject to the availability of personnel, and you must pay the franchisor the then current Opening Assistance Fee amount.

11.  Computer Hardware and Software:  $1,500 to $15,000

  • The low figure assumes that you will lease or finance payment of the computer system and reflects three months of estimated lease or finance payments ($500 per month). The high figure assumes that you will purchase the computer system.

12.  Initial Inventory/Supplies:  $7,500 to $12,000

  • This estimate includes the cost of food, beverages, condiments, packaging, and other supplies for approximately the first two to ten days of operations.

13.  Professional Services:  $2,500 to $7,000

  • This estimate covers professional and state filing fees for forming a business entity, and professional fees for engaging an attorney to assist you with your franchise purchase. The cost of professional fees can vary widely.

14.  Opening Advertising Expenses:  $3,500 to $10,000

  • Unless the parties agree otherwise, you must carry out an advertising program that promotes the opening of the Store that complies with the company’s written specifications. The franchisor must approve all advertising items, methods, and media.

15.  Insurance:  $250 to $3,000

  • This amount represents an estimated down payment of your annual insurance premiums, equal to one month’s payment. Your cost of insurance may vary depending on the insurer, the location of your Store, your claims history, and other factors.

16.  Additional Funds (3 Months):  $10,000 to $40,000

  • You will need additional funds during the start-up phase of your business to pay employees, purchase supplies, and pay other expenses. The franchisor estimates the start-up phase to be three months from the date you open for business. These amounts do not include any estimates for debt service. You must also pay royalties and other related fees.
  • These figures are estimates and the franchisor cannot assure you that you will not have additional expenses.

17.  Total:  $203,000 to $495,250

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