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Earnings Claims of Top Franchises Revealed

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

by Franchise Chatter on December 10, 2013

in Franchise Costs, Hamburger Franchise

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MOOYAH Burger and Fries Photo

This post was updated on August 17, 2016 to reflect information from MOOYAH’s 2016 FDD (Item 7).

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

1.  Initial Franchise Fee:  $25,000 to $35,000

  • If you enter a Multi-Unit Operator Agreement with MOOYAH, the Initial Franchise Fee will be $35,000 to purchase your first Restaurant and $25,000 for subsequent Restaurants under the Multi-Unit Operator Agreement.

2.  Rent and Security Deposit:  $4,200 to $14,100

  • MOOYAH Restaurants are typically located in commercially zoned shopping or entertainment areas.
  • Due to the cost of land acquisition and new construction, the premises for MOOYAH Restaurants are normally leased. The franchisor assumes that you will lease the premises for the Restaurant and the estimates do not include costs of land acquisition and construction of a building.

3.  Leasehold Improvements:  $126,000 to $250,000

  • The leasehold improvements estimate is based on the cost of adapting MOOYAH’s prototypical architectural and design plans (including architect fees) to a facility containing approximately 2,300 square feet.
  • The leasehold improvements estimate will be affected by various factors like the location of the Restaurant, local market conditions, wage rates, and whether you must use union labor.
  • The estimates assume that the landlord will provide connections to adequate electrical, gas, water, and sewage service. Your actual costs may or may not include site preparation and build-out costs, depending on the arrangements you negotiate with your landlord.
  • If your landlord contributes to the cost of build-out, total leasehold improvement costs could be reduced. 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.

4.  Furniture, Fixtures, Equipment, and Signage:  $158,000 to $210,000

5.  Initial Training Costs:  $6,000 to $15,900

  • The franchisor provides initial training for 2 people at no additional charge. Therefore, these estimates include only your out-of-pocket costs for the training of these people. 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 your selection of salary levels, lodging and dining facilities, mode and distance of transportation, and the wages payable to your employees.

6.  Computer Hardware and Software:  $12,000 to $15,000

  • This estimate also includes the set-up fee and monthly fee charged for online and text message ordering for the first three months of operation, and the annual subscription cost of the POS support and maintenance and POS data warehouse for the first year.

7.  Initial Inventory/Supplies:  $13,500 to $18,000

  • The franchisor estimates that this range will cover the cost of certain small wares including utensils and dishes. This estimate also includes the cost of food, beverages, condiments, and supplies for approximately the first 2 to 10 days of operation. The high end of the range includes the set-up fees for programs related to the marketing and advertising for your Restaurant, and business directories.

8.  Uniforms:  $500 to $1,000

9.  Professional Services:  $1,000 to $5,300

  • This estimate includes the cost to establish an entity to hold the franchise and review the franchise documentation. The cost of professional services can vary widely.

10.  Grand Opening Promotional Expenses:  $1,000 to $10,000

  • You must carry out a grand opening promotion for the Restaurant in compliance with the company’s written specifications within 4 weeks of opening. The franchisor must approve all advertising items, methods, and media.

11.  Insurance:  $450 to $3,000

  • This amount represents an estimate of the down payment on your annual insurance premiums for the first 3 months of operation. You must obtain the insurance coverage the franchisor requires, which may be periodically changed. The franchisor must be named as an additional insured on these policies.
  • Your cost of insurance may vary depending on the insurer, the location of your Restaurant, your claims history, and other factors.

12.  Licenses and Permits:  $700 to $6,000

  • These are estimates of the costs for obtaining local business licenses which typically remain in effect for 1 year. These figures do not include occupancy and construction permits which were included in the leasehold improvement costs. The cost of these permits and licenses will vary substantially depending on the location of the Restaurant.

13.  Additional Funds (for initial 3-month period):  $25,000 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 3 months from the date you open your MOOYAH Restaurant.
  • These amounts do not include any estimates for debt service or payroll costs, and it does not include any revenues you may earn during the three-month start-up phase.
  • These figures are estimates, and the franchisor cannot assure you that you will not have additional expenses.

14.  Total:  $373,350 to $623,300

  • The franchisor relied on its experience in operating MOOYAH Restaurants since 2007 in Dallas, Texas when preparing these estimates.

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