Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Jake’s Wayback Burgers Franchise Costs (2013 FDD)

by Franchise Chatter on March 6, 2014

in Franchise Costs, Hamburger Franchise

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Detailed Estimates of Jake’s Wayback Burgers Franchise Costs Based on Item 7 (Estimated Initial Investment) of Jake’s Wayback Burgers’ 2013 Franchise Disclosure Document

1.  Initial Franchise Fee:  $35,000

  • The initial franchise fee is $35,000 for one franchise.
  • If you sign a Development Agreement to establish and operate multiple franchises, the initial development fee will be $35,000 for the first restaurant to be developed and $20,000 for each additional restaurant.
  • The franchisor will credit $35,000 against the initial franchise fee payable under your first Franchise Agreement, and $20,000 payable under each additional Franchise Agreement, when you sign the Franchise Agreements for restaurants to be opened pursuant to the Development Agreement.

2.  Leasehold Improvements:  $40,000 to $150,000

  • Jake's Wayback Burgers Photo by chief_huddlestonYou must renovate or construct your restaurant in accordance with the franchisor’s specifications. This estimate includes costs of construction and assumes that basic plumbing, electricity, and heat or air conditioning exist on the premises.
  • You may choose to spend more for leasehold improvements, but this is not normally recommended.
  • These sums do not include any sums for purchase of real property, as it is not anticipated that you will purchase real property.

3.  Initial Rent Outlays:  $2,500 to $12,000

  • If you do not already own a site for your Jake’s Wayback Burgers restaurant, you must lease or acquire a site for the term of the Franchise Agreement. The franchisor recommends that your restaurant be located in an end-cap strip shopping center or on its own as a freestanding unit, and provide a covered outside eating area.
  • In the event that you lease the premises for the restaurant, the franchisor has provided in the charts an estimated cost, which estimate includes one month’s rent plus one month’s rent as security deposit and one month’s pro-rated share of common area maintenance, taxes, and insurance.
  • The franchisor has not provided an estimate of legal or other professional costs incurred for negotiating the lease. The franchisor has not provided an estimate of costs incurred for purchasing the premises for a restaurant, as the franchisor anticipates you will rent the premises.
  • The approximate size of the premises and the building for your restaurant will range from 1,200 to 2,400 square feet at a cost of $12 to $100 per square foot.

4.  Equipment:  $65,000 to $90,000

  • This estimate includes the costs of an initial equipment package (from various designated suppliers) which includes restaurant equipment, including refrigerators, freezers, grills, fryers, stools, point-of-sale system, office equipment (computers and furniture), music system, and an audio and visual surveillance system.

5.  Outside Fixtures and Furnishings:  $5,000 to $10,000

  • If your restaurant has space for an outside eating area, you must purchase fixtures and furnishings for the outside eating area. This estimate includes the costs of outside table and/or chairs, lighting fixtures, and a canopy or an awning.

6.  Signage:  $3,000 to $15,000

7.  Initial Inventory:  $4,000 to $7,000

  • You must purchase your initial inventory of products, as prescribed by the franchisor in its confidential manuals or otherwise in writing, including beef, french fries, ice cream, buns, and other food items and paper products (bags, plates, and cups). Your cost will be based upon the amount purchased.
  • Your amount purchased will depend on your anticipated sales for the restaurant, which will depend on a variety of factors such as the size and location of your restaurant and overall anticipated demand.

8.  Supplies:  $5,000 to $7,500

  • You must purchase supplies for the restaurant. These estimates include the cost of uniforms and smallwares, which include cooking, cleaning (cleaning products, chemicals, brushes), and serving (utensils).

9.  Travel and Living Expenses During Training:  $1,000 to $10,000

10.  Utility Deposits:  $0 to $5,000

11.  Prepaid Insurance Premiums:  $500 to $5,000

12.  Permits and Licenses (including design fees):  $1,000 to $10,000

  • Before the opening of your restaurant, you must obtain all necessary permits and licenses. The above estimates include architectural fees, building permits, certificates of occupancy, and certificates of health.
  • This cost does not include impact or major facility fees that may be required to build your restaurant.

13.  Grand Opening Advertising:  $5,000

  • You must spend $5,000 on grand opening advertising between 30 and 90 days after opening in the form and manner prescribed by the franchisor in writing.

14.  Additional Funds and Miscellaneous:  $5,000 to $20,000

  • This estimates your other initial three-month start-up expenses, less income earned, not including any salary, finance costs, debt service, or reimbursements or other payments to you.
  • This also includes initial employee recruitment, training and wages, legal and accounting fees (if any), other variable costs (e.g. ongoing electricity, telephone, heat, etc.) and general and administrative costs.

15.  Total:  $172,000 to $381,500

  • The franchisor relied on its affiliate’s experience in the restaurant business to compile these estimates.

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{ 1 comment… read it below or add one }

Greg December 25, 2015 at 9:02 pm

I was a former Wayback Burger franchisee. If you want the real story contact me. gmac1170@comcast.net


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