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Franchise Costs: Detailed Estimates of MOOYAH Franchise Costs (2017 FDD)

by Franchise Chatter on December 10, 2013

in Franchise Costs, Hamburger Franchise

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This post was updated on August 31, 2017 to reflect information from MOOYAH’s 2017 FDD (Item 7).

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

1.  Initial Franchise Fee:  $35,000

  • The Initial Franchise Fee is $25,000 if the Franchise Agreement is executed pursuant to an Area Development Agreement, and it is not the 1st Franchise Agreement so executed.

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, MOOYAH assumes that you will lease the Premises. As a result, the numbers do not reflect the costs of land acquisition and construction of a building.

3.  Leasehold Improvements:  $215,000 to $268,000

  • 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 2,100 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 estimate assumes 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. During MOOYAH’s last fiscal year, its franchisees received an average of $61,000 from landlords for tenant improvement allowances at each Restaurant.
  • 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:  $101,000 to $205,000

5.  Initial Training Costs:  $8,400 to $12,000

  • MOOYAH does not assess a fee for its initial training for up to 2 people. However, you are responsible for all expenses you or your employees incur in attending and participating in the initial training program, like travel, lodging, meals, wages, and benefits. 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 $14,600

  • In addition to the costs of the hardware and software, this estimate includes the set-up fee and monthly fee charged for online and application-based ordering for the first 3 months of operation, the annual subscription cost of the POS support and maintenance, and POS data warehouse for the first year.

7.  Initial Inventory/Supplies:  $8,000 to $10,000

  • MOOYAH 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 operations.

8.  Uniforms:  $1,000 to $2,000

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 $5,000

  • You must carry out a grand opening promotion for the Restaurant in compliance with MOOYAH’s written specifications within 16 weeks of opening. MOOYAH 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 MOOYAH requires, which may be periodically changed. MOOYAH 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. MOOYAH estimates the start-up phase to be 3 months from the date you open your 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 3-month start-up phase.
  • These figures are estimates, and MOOYAH cannot assure you that you will not have additional expenses.

14.  Total:  $412,750 to $620,000

  • MOOYAH relied on its and its Predecessor’s, as well as its franchisees’, experience when preparing these estimates.

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