Franchise Costs: Detailed Estimates of Moe’s Southwest Grill Franchise Costs (2016 FDD)

This post was updated on June 12, 2016 to reflect information from Moe’s Southwest Grill’s 2016 FDD (Item 7).

Detailed Estimates of Moe’s Southwest Grill Franchise Costs Based on Item 7 (Estimated Initial Investment) of Moe’s Southwest Grill’s 2016 Franchise Disclosure Document

• The amounts shown for the Initial Franchise Fee are actual, all other amounts represent estimates, based on the franchisor’s years of experience as franchisor of the system, the franchisor’s affiliate’s experience as owner and operator of Restaurants in Atlanta, Georgia, and the franchisor’s executives’ years of experience in the restaurant industry. These costs vary significantly from locale to locale.

1.  Initial Franchise Fee:  $30,000

2.  Rent:  $4,500 to $20,000

• These figures presume that you will be leasing the Restaurant premises and only represent rent for one month.

• These figures are based on the franchisor’s experience in Atlanta, Georgia and other geographic areas in which there currently are open Restaurants. These figures may vary considerably in other parts of the United States.

• A typical Restaurant occupies about 2,200 to 2,600 square feet of space.

• A Restaurant may be located in either a freestanding building, in an in-line retail plaza space, or other non-traditional venue, but in any event, the Restaurant requires ample parking, good visibility, and availability of prominent signage.

3.  Leasehold Improvements:  $118,530 to $391,000

• The cost of leasehold improvements will vary depending on the size and condition of the premises, whether or not there are any existing  and comparable leasehold improvements in the premises, the extent and quality of improvements you desire over and above the minimum requirements, the landlord’s cash contribution to the cost of the improvements, and the like.

• Improvements include electrical, carpentry, floor covering, and painting. These costs are net of any Tenant Improvement Allowance received.

4.  Millwork:  $22,600 to $35,000

5.  Equipment Package:  $61,000 to $126,000

• You must purchase or lease certain equipment (like kitchen equipment), machinery, and decorations that comply with the franchisor’s Standards. Costs will vary depending on a number of factors including, without limitation, building codes and health requirements of the state where your Restaurant is located.

• The franchisor estimates that the cost for the equipment package will not exceed $126,000.

6.  Furniture:  $17,000 to $24,000

7.  Smallwares:  $10,000 to $17,000

8.  Menu Board, Graphics, Interior Signage:  $2,200 to $9,000

9.  Exterior Signage:  $5,000 to $20,000

• The cost of your exterior sign will vary depending on the size, color, and back-lite channel letters of the sign and other specifications as the franchisor requires.

10.  Computer Hardware/Software, Training:  $12,600 to $23,700

11.  TV, Music:  $1,500 to $2,000

12.  Drink Dispenser:  $0

13.  Architect:  $7,000 to $21,000

14.  Grand Opening Marketing:  $25,000 to $60,000

• You must conduct a grand opening advertising campaign with the opening of your Restaurant. You must pay all costs of the grand opening, including publicity costs, promotional costs, plus the full cost of any price reductions or other customer inducements.

• Costs may vary depending on your market and the type of advertising used; however, you must spend a minimum of $25,000 ($35,000 if your Restaurant is the first Restaurant to open in a Designated Market Area) during the period beginning 4 weeks before and ending 8 weeks after the opening of your Restaurant.

• You must submit your grand opening marketing plan to the franchisor 8 weeks prior to your grand opening.

15.  Insurance:  $3,500 to $12,000

• You must obtain and maintain during the term of your Franchise Agreement, at your expense, a comprehensive business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, employment practices liability, and workers’ compensation insurance.

• The cost of such insurance will vary depending on your Restaurant location, the claims experience of commercial businesses in your area, and your prior insurance claim experience.

16.  Miscellaneous Opening Costs:  $10,000 to $25,000

• This figure includes amounts for utility costs, business licenses, permits, opening assistance, and the cost of training your employees.

17.  Security Deposits:  $4,500 to $30,000

18.  Travel and Living Expenses While Training:  $5,000 to $10,000

• You must arrange and pay for all food, travel, and lodging expenses for the people who attend the Management Training Program. Costs will vary depending on the number of trainees, the distance traveled, and the type of lodging.

• The amount shown does not include the cost of transportation.

19.  Opening Inventory:  $4,000 to $10,000

20.  Additional Funds – 3 Months:  $25,000 to $50,000

• This estimates the funds needed to cover your expenses during the first 3 months of operation. These expenses include payroll costs (excluding any wage or salary paid to you), other miscellaneous expenses, and working capital.

• These figures are estimates based on past business experience. The franchisor cannot guarantee that you will not have additional expenses starting the business.

21.  Total Initial Investment:  $368,930 to $915,700

• Restaurants located in non-traditional venues like office buildings, hospitals, stadiums, or university food service facilities will likely experience lower initial investment expenditures than Restaurants in traditional locations like malls or strip centers.

Tagged as: Moe's Southwest Grill