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Franchise Costs: Detailed Estimates of Toppers Pizza Franchise Costs (2017 FDD)

by Franchise Chatter on April 10, 2014

in Franchise Costs, Pizza Franchises

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Toppers Pizza Franchise Exterior Photo

This post was updated on September 1, 2017 to reflect information from Toppers Pizza’s 2017 FDD (Item 7).

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

1.  Initial Franchise Fee:  $10,000 to $30,000

  • The low end of the range represents the initial franchise fee you will pay if this is your sixth or subsequent Restaurant. The high end of the range represents the initial franchise fee you will pay if this is your first Restaurant.

2.  Travel and Living Expenses for Your Initial Training:  $2,000 to $8,000

  • Up to 2 individuals may participate in the initial training program, including the Managing Partner and a Restaurant Manager. The low end of the estimated range is for expenses for one Managing Partner to attend the initial training. The high end of the estimated range is for expenses for one Managing Partner and a Restaurant Manager to attend the initial training.
  • Initial training will take place at Toppers Pizza’s headquarters in Whitewater, Wisconsin, or at another suitable location that the franchisor designates.
  • Although the franchisor does not charge tuition for this training, you will be responsible for all costs associated for you and your staff to attend.
  • The duration of the training program for the Managing Partner and Restaurant Manager (if applicable) is typically 28 to 30 days.

3.  Travel and Living Expenses for the Franchisor’s Training Team:  $3,000 to $13,000

  • The figures estimate the travel and living expenses for 4 to 7 members of the franchisor’s training team, to participate in the setup and opening of your first restaurant.
  • The low estimate is for the expenses incurred for a 7-day commitment while the high estimate is for 35 days. After consultation with you, the franchisor will determine the number of training days required at your restaurant.

4.  Equipment and Smallwares:  $80,000 to $135,000

  • These figures represent the purchase of food service equipment, smallwares, millwork, the exhaust system and light packages for your restaurant, and all items necessary to transport and deliver menu items to the customer such as hot bags, car top identification, and uniforms for delivery drivers.
  • Your delivery employees will generally use their own personal vehicles for transporting and delivering menu items, so these figures do not include any estimate for the purchase or lease of delivery vehicles.

5.  Construction and Leasehold Improvements:  $119,000 to $168,000

  • Estimated costs identified here are for tenant improvements of a typical property with 1,400 to 1,600 square feet of space, with a range of improvement costs of between $85 to $105 per square foot (the low estimate of $85 per square foot contemplates a landlord contribution or “tenant allowance” that serves to reduce the cost by approximately $10 per square foot).
  • These figures are indicative of standard commercial pricing in Madison, Wisconsin.

6.  Indoor and Outdoor Signage:  $3,000 to $18,000

  • This is an estimate of the cost to obtain permits, fabricate, and install an approved Toppers Pizza “trade dress” package for a typical restaurant storefront. The “trade dress” package consists of three components:  exterior storefront, interior storefront, and interior point-of-sale frames and graphic materials.
  • The low estimate contemplates a non-illuminated exterior storefront signage, while the high estimate contemplates an individually lighted channel letter configuration.

7.  Pre-Opening Salaries and Payroll:  $4,000 to $10,000

  • The lower figure indicates that the franchisee will act as location manager and includes only the salary for 2 assistant managers over a period of 2 weeks, plus one week of staff training wages for 15 hourly employees, to include clean-up of the site and training sessions prior to the opening.
  • The higher figure indicates training wages paid for a location manager and 2 assistants for 2 weeks, plus one week of wages for the training of 30 hourly employees.

8.  Pre-Opening Rent:  $0 to $12,000

  • The low end of this estimate assumes free pre-opening rent has been negotiated as part of the lease. The high end of this estimate assumes a 1,600 square foot premises with 1 month’s rent paid as security deposit, and the first 3 months’ rent.
  • The high estimated lease rental amount per month is indicative of a 1,600 square foot facility in the Madison, Wisconsin area with a rent of $30 per square foot annually.
  • Pre-paid rent is generally non-refundable, while security or other deposits may be refundable either in full or in part, depending upon the terms of your lease.

9.  Utility and Insurance Deposits:  $2,000 to $6,000

  • Utility deposits will vary due to the type of services required for the facility and the municipality from which it is being contracted.
  • Typically, an insurance deposit of a 1/2-year premium will need to be made in order to obtain the minimum required insurance.

10.  Market Introduction and Team Recruiting Program:  $8,000 to $11,000

  • The figures indicated include an estimate of the costs associated with the placement of recruitment advertisements. Beyond these recruitment costs, the remainder of the estimated amount pertains to the execution of a Market Introduction Program.
  • You will be expected to launch this 2 to 6 month advertising and marketing campaign to raise awareness of your new location. This Market Introduction Program will begin 1 month before the scheduled opening and continue for 2 to 6 months after.

11.  Opening Inventory:  $5,000 to $10,000

  • An opening inventory will include all food, cleaning products, and packaging necessary for the opening of your location. In most situations, this will be sufficient for a period of 7 days.

12.  Architectural Fees:  $8,000 to $14,000

  • An architect you hire will prepare architectural, engineering, and construction drawings and site plans. The figures shown in the table contemplate the fees you should expect to pay to use the services of a state-licensed architect.

13.  Permits and Professional Fees:  $750 to $6,500

  • These fees are primarily for the services rendered by your attorney, accountant, and other professional advisors.
  • Additionally, you are responsible for obtaining and maintaining all required permits and licenses necessary to operate the Toppers Pizza restaurant.

14.  POS System Hardware:  $13,000 to $15,000

  • These fees are for the hardware required for the POS system the franchisor requires you to use. The typical restaurant requires 5 to 7 stations.

15.  POS System Software Licenses and Installation:  $5,150 to $5,600

  • You may buy Vision Software licenses directly from the franchisor. Vision Software licenses currently retail for $795 each. However, the franchisor sells them to you for $450 each, for a total of $3,150 to $3,600, depending on the number of licenses you must purchase.

16.  POS System Support and Maintenance:  $516 to $552

  • The franchisor currently requires that you enter into an agreement for the Vision Software support services of a third-party. You are required to subscribe to the Premier Support & Maintenance plan with the franchisor’s designated supplier.
  • The Premier Support and Maintenance plan costs $6 per month multiplied by the number of stations at your Restaurant for maintenance, plus $109 per month (irrespective of how many stations are at your Restaurant) for support services.

17.  Phone System:  $4,000 to $5,500

  • This is the estimated cost for the franchisor’s designated vendor to purchase, install, and start up the phone system hardware. This system is a requirement of Toppers Pizza.

18.  Project Management:  $0 to $7,500

  • If you are opening your first Toppers Pizza Restaurant, the franchisor requires you to enter into the Project Management Agreement. If you are opening your second or subsequent Toppers Pizza restaurant, before or after you sign a Franchise Agreement, you may request that the franchisor provide Project Management Assistance, and it may (but is not obligated to) agree to provide Project Management Assistance.
  • The fee for Project Management Assistance is $7,500, payable to the franchisor in 3 equal installments upon completion of certain milestones.

19.  Opening Extension Fee:  $0 to $5,000

  • Under the Franchise Agreement, you must acquire possession of a location for your restaurant within 120 days after signing the Franchise Agreement and have your restaurant open and operating within 180 days after signing the lease or acquiring the location.
  • If you fail to meet the deadline to open your restaurant and you wish to extend the deadline, the franchisor may grant you a one-time, six-month extension to have your restaurant open and operating. In exchange for granting you this opening extension, you agree to pay the franchisor a nonrefundable extension fee of $5,000.

20.  Additional Funds:  $25,000 to $50,000

  • This is an estimate of the amount of additional operating capital you may need to operate your restaurant during the first 3 months after you open your business. The estimate here does not include any draw or salary for you.

21.  Total:  $292,416 to $530,652

  • This amount is based upon the experiences of the franchisor’s affiliates in opening and owning multiple Toppers Pizza restaurants since 1991.

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