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Franchise Costs: Detailed Estimates of Famous Dave’s Franchise Costs (2016 FDD)

by Franchise Chatter on January 17, 2014

in BBQ Franchise, Franchise Costs



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This post was updated on December 19, 2016 to reflect information from Famous Dave’s 2016 FDD (Item 7).

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

  • Famous Dave’s Restaurants serve combinations of hickory-smoked spareribs, baby back ribs, beef brisket, herb-roasted chicken, barbecue sandwiches, char-grilled burgers, cornbread, potato salad, coleslaw, Wilbur beans, desserts, and other food and beverage items.
  • For the estimated range of costs, Famous Dave’s relied on its years of experience in the restaurant business.
  • Payments are not refundable unless otherwise noted. Famous Dave’s does not offer direct or indirect financing.
  • These figures are estimates only, and it is possible that you may have additional or greater expenses during this period.

Full Service

1.  Initial Fee:  $45,000

  • If you sign a Reservation Agreement, you pay $10,000, which the franchisor credits towards the Initial Fee. You will pay the franchisor the remaining balance of the Initial Fee when you sign the Franchise Agreement.

2.  Leasehold Improvements:  $475,000 to $1,300,000

  • Lease only:  These figures represent the cost to lease and remodel an existing building to a Famous Dave’s Restaurant. Famous Dave’s Restaurants are generally located in free-standing buildings and end caps in retail centers, and require from 2,400 square feet up to 6,200 square feet of floor space with seating for 50 to 210 guests. The rental rate will generally be between $15 and $35 per square foot.

3.  Land, Building, and Construction:  $2,410,000 to $2,900,000

  • Purchase only:  If you choose to purchase the land and building for your Famous Dave’s Restaurant, your initial costs likely will be significantly higher than if you choose to lease the premises.
  • The land required for your Famous Dave’s Restaurant will require from 0.75 acres to 2 acres, and the building will require from 2,400 square feet to 6,200 square feet of floor space with seating for 50 to 210 guests.
  • Your initial investment if you choose to purchase the land and building may range from $400,000 to $1,250,000 for the cost of the property and $100,000 to $1,300,000 for the cost of construction or remodeling (not including equipment costs).
  • In addition, you may be required to landscape or make other improvements to your site which may range from $100,000 to $350,000. Thus, your total estimated expenditures to purchase the land and building for your Restaurant may range from $600,000 to $2,900,000.
  • These estimates are based upon the experience of Famous Dave’s in the Midwestern and Eastern United States; depending upon your area, your costs may be higher.

4.  Travel and Living Expenses for You and Your Management Staff During Training:  $25,000 to $40,000

  • You must pay for the Travel Expenses and other expenses while you and your Management Staff attend the initial training program. Salaries and Benefits are not included.

5.  Reimbursement of Expenses for Opening Team:  $55,000 to $90,000

6.  Furniture, Fixtures, Decor, and Equipment:  $500,000 to $650,000

  • This includes the cost of the computer hardware, peripherals, and software that will serve as your point-of-sale system, and the maintenance agreement for the system, and also includes the costs for decor items and installation services.
  • Your furniture, fixtures, decor, and equipment may be financed through a bank or other financial institution, leased or purchased outright.

7.  Architectural and Engineering Fees:  $50,000 to $170,000

8.  Signs:  $45,000 to $75,000

9.  Liquor License Costs:  $25,000 to $75,000

  • Liquor license costs generally are less than $35,000. However in isolated instances, Famous Dave’s or one of its franchisees has had to pay up to $900,000 for a liquor license. You should check with the issuing authority to determine the cost and availability of your liquor license.

10.  Site Model Report Fee:  $750

11.  Restaurant Lease Payments – 3 Months:  $10,500 to $25,000

  • Lease only:  The monthly rental if you lease the premises for your Franchised Location may include common area maintenance fees and real estate taxes. The amount indicated may also include a one month advanced rental payment, security deposit, and prepaid expenses. Isolated instances could be higher.

12.  Employee Salaries – 3 Months:  $60,000 to $95,000

  • This estimate does not include the salaries for you or your Management Staff during training.

13.  Miscellaneous:  $5,000 to $10,000

  • Miscellaneous fees include such items as security, utility and license deposits, impact fees, insurance premiums for three months, and professional services such as attorneys and accountants.

14.  Grand Opening Celebration:  $15,000 to $25,000

  • You must spend a minimum of $15,000 on the grand opening celebration for your Restaurant. Famous Dave’s can require that you spend up to $25,000 for the initial marketing and advertising campaign for your Restaurant.

15.  Additional Funds – 3 Months (these figures have not been offset by operating revenues):  $5,000 to $10,000

  • During the first three months of operations, you will need additional funds to cover your expenditures for supplies, food and beverage inventories, local advertising, utilities, and other miscellaneous operating costs.
  • This estimate has not been offset by any allowance for your operating revenues during this three month period.

16.  Total If Premises Leased by You:  $1,316,250 to $2,610,750

17.  Total If Premises Purchased by You:  $3,240,750 to $4,185,750

Line Service

  • The total estimated initial investment necessary to begin operation of a line service Famous Dave’s restaurant ranges from $811,750 to $1,700,750 if premises is leased by you, or $1,101,250 to $2,375,750 if premises is purchased by you.

Counter Service

  • The total estimated initial investment necessary to begin operation of a counter service Famous Dave’s restaurant ranges from $1,130,750 to $2,095,750 if premises is leased by you, or $2,260,750 to $3,458,750 if premises is purchased by you.

Flex Service

  • The total estimated initial investment necessary to begin operation of a flex service Famous Dave’s restaurant ranges from $1,330,750 to $2,670,750 if premises is leased by you, or $3,235,750 to $4,195,750 if premises is purchased by you.



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