Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Tilted Kilt Franchise Costs (2014 FDD)

by Franchise Chatter on April 24, 2014

in Franchise Costs, Restaurant Franchise

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Tilted Kilt at The Shoppes at Hamilton

Detailed Estimates of Tilted Kilt Franchise Costs Based on Item 7 (Estimated Initial Investment) of Tilted Kilt’s 2014 Franchise Disclosure Document

1.  Initial Franchise Fee:  $75,000

  • The franchisor will discount the initial franchise fee for existing franchisees who enter into additional franchise agreements.

2.  Construction Buildout and Leasehold Improvements:  $380,000 to $1,500,000

  • Typically, a Tilted Kilt restaurant will have approximately 5,000 to 8,000 square feet of retail space and seat over 225 customers inside. Ideally, patio seating is also available.
  • If you develop a free-standing Tilted Kilt restaurant, these ranges may be higher.
  • The leasehold improvements that you will typically make to a built but unimproved location include:  installation of a grease trap, interior remodeling, floor covering, painting, HVAC, electrical design, and other improvements.
  • These estimated costs include payments for architects, and, if your restaurant is located in leased space, an as-built survey completed before the creation of architectural plans. You will be directly responsible for these fees and costs.

3.  Kitchen Equipment, Smallwares, and Beer System:  $150,000 to $320,000

  • This item includes the estimated costs to obtain and install the grill and the ventilation system for your grill, as well as refrigerators, freezers, sinks, dishwashers, pizza oven, beer taps, food preparation stations, and smallwares.

4.  Furniture, Fixtures, and Signs:  $75,000 to $332,000

  • This item includes the estimated costs to obtain required furniture, fixtures, and signs for a Restaurant, including bar, tables, chairs, furniture, counters, and other restaurant items, as well as gaming furniture (such as pool tables and shuffle board).
  • The gaming furniture is typically leased; the chart includes the initial lease costs for these items. If purchased, the gaming furniture would cost around $25,000.

5.  Electronics:  $65,000 to $225,000

  • This item includes required electronics and audio/visual equipment, such as projectors, televisions, wall mounts, speakers, a motorized screen, a Digital Video Recorder player, audio and video matrix switches, power supplies, a music sound system, amplifiers, a control system, video surveillance equipment, and warranty plans for certain products, each that meet the specifications prescribed in the Operating Manual.

6.  Point-of-Sale System, Software, and Office Equipment:  $36,000 to $55,000

  • This item includes the estimated costs to purchase and license a computerized point-of-sale system and software, telephone system, photocopier, computers and software, and fax machine.
  • The estimates include charges for 6 to 8 point-of-sale terminals; your costs may be higher if you decide to add more terminals.

7.  Opening Inventory, Costumes/Employee Attire, and Supplies:  $40,000 to $80,000

  • You must open with and maintain an adequate inventory of menu items, food and ingredients, beer, liquor, beverages, costumes or other employee attire, paper goods and branded products, and merchandise for retail sale to serve your customers.

8.  Security Deposits, Utility Deposits, Licenses; Related Professional Fees:  $12,000 to $145,000

  • Security deposits, if applicable to your Restaurant, range from one to two months’ rent; utility deposits range from a nominal amount to approximately $4,000; and business licenses range from approximately $100 to $1,000 depending on your location.
  • The professional and other fees and costs relating to the acquisition of a liquor license may be as much as $120,000 or more. Since a liquor license may be controlled by local authorities in your area, the costs may vary greatly.

9.  Initial Franchisee Training (Travel and Living Expenses):  $20,000 to $50,000

  • The high range estimate covers expenses for up to four people attending up to a 5-week training session and approximately one week of owner brand training for one person, each in Tempe, Arizona or another location the franchisor may designate.
  • The estimates do not include travel and living expenses incurred in attending and participating in a Restaurant opening; this is recommended if timing permits, but is not mandatory.

10.  Grand Opening Promotion:  $16,000 to $20,000

  • You must spend a minimum amount, which the franchisor will designate when you execute the Franchise Agreement (which will not be in excess of the high range estimate noted), on marketing and promotion of your Tilted Kilt restaurant.
  • Promotions will start at least four weeks before opening and run through at least 60 days after opening.

11.  Casting Call Event:  $5,000 to $10,000

  • You must hold a casting call event before your Tilted Kilt restaurant opens for business. Expenses will include renting the casting location (such as a hotel, lounge/bar, onsite construction trailer, or empty retail space) and purchasing decor, office supplies, casting and recruiting materials, print materials, marketing/advertising/radio, and preparing a recruiting budget.

12.  Additional Funds – 3 Months:  $45,000 to $100,000

  • This item includes a variety of expenses and working capital items during your start-up phase such as:  demographic and psychographic report; rent; debt service; legal costs; accounting fees; insurance premiums; advertising and promotional expenses and materials; employee salaries; and other miscellaneous costs. However, this item excludes your salary.
  • Although not required, if you choose to develop a catering business, you may incur additional expenses (to purchase or lease a vehicle, serving dishes, warming system, and linens, among others).

13.  Total Estimated Initial Investment:  $919,000 to $2,912,000

  • The franchisor relied on its principals’ combined experience of over 41 years in the restaurant business, and its principals’ experience in the opening of other non-restaurant franchised businesses, when preparing these figures.

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