Franchise Costs: Detailed Estimates of Moe’s Southwest Grill Franchise Costs (2020 FDD)

Updated June 11, 2020.

Detailed Estimates of Moe’s Southwest Grill Franchise Costs Based on Item 7 (Estimated Initial Investment) of Moe’s Southwest Grill’s 2020 Franchise Disclosure Document

1.  Initial Franchise Fee:  $30,000

2.  Construction and Build Out Costs:  $136,000 to $341,000

• This estimate includes fees paid to a general contractor you engage to build out the Restaurant to meet Moe’s Standards and to obtain a site selection analysis from an Approved Supplier.

• Leasehold improvements include, but are not limited to, HVAC, electrical, carpentry, floor covering, and painting.

• The cost of a general contractor will vary widely 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 Moe’s minimum requirements, your landlord’s cash contribution to the cost of the improvements, and the local costs of material and labor.

• In certain major metropolitan markets such as Boston, Chicago, New York, Los Angeles, San Francisco, Seattle, and Washington, D.C., costs could be significantly higher than the estimates provided here due to local market rates for materials and labor.

• This estimate does not include leasehold improvements for freestanding buildings, as the costs for this format may vary significantly.

• You may be able to negotiate tenant improvement allowances from your landlord. The estimate is presented net of estimated tenant improvement allowances. For the low estimate, Moe’s estimated a tenant improvement allowance of $72,000, which is approximately the average tenant improvement allowance that franchisees have reported to Moe’s and its affiliates for similar units. For the high estimate, Moe’s assumed that a tenant improvement allowance was not available.

3.  Permitting:  $1,700 to $2,100

• This estimate includes the cost of acquiring construction permits, including permit fees. Your costs will vary depending upon your Restaurant’s location. In some markets, the costs of required permits may significantly exceed Moe’s estimates.

4.  Equipment Package:  $83,000 to $120,000

• You must purchase or lease from an Approved Supplier certain equipment (like kitchen equipment) and machinery that complies with Moe’s Standards. Your actual 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.

• These amounts do not include the costs of any owned, hired, or leased delivery motor vehicles that you may utilize in the operation of the Restaurant. If you offer delivery and catering services under the terms of the Franchise Agreement, you may need to purchase at least one branded catering vehicle equipped per Moe’s specifications, which will cost approximately $25,000 to $35,000 if purchased, or $500 to $700 per month if leased, although leased costs may vary significantly.

5.  Millwork:  $40,000 to $44,000

• You will incur expenses for millwork at the Restaurant, which may include the cost of purchasing and installing cabinets and counters.

6.  Furniture:  $25,000 to $55,000

• You must purchase furniture such as tables, chairs, and office furniture from an Approved Supplier that meets Moe’s Standards.

7.  Menu Board, Graphics, and Interior Signage:  $12,000 to $12,800

• This estimate includes the cost of digital and/or static menu boards and interior signage. The cost will vary based on the size of your Restaurant.

8.  Exterior Signage:  $10,000 to $10,500

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

9.  Computer System and Software Training:  $10,000 to $15,000

• You must purchase, lease, and/or license and install at the Restaurant the POS System, computer systems, mobile hardware, software, online ordering platform, associated computer hardware, telephone lines, network connections, communications equipment, high-speed internet access (e.g. DSL or cable), credit card, gift card and loyalty card processing equipment, and other equipment that Moe’s requires from time to time (collectively, the “Computer System”).

10.  Smallwares:  $11,700 to $12,000

• This estimate includes the cost of purchasing cooking utensils, cutlery, small equipment, and other smallwares.

11.   TV/Music:  $2,000 to $3,300

• Moe’s may require you to install televisions and audio equipment in the Restaurant and to enter into subscriptions for television and audio services.

12.  Architect/Engineer:  $11,500 to $15,800

• You must engage licensed architects and engineers (for mechanical, electrical, plumbing, and structural) to draft standard construction plans for your Restaurant. Your costs will vary depending upon the location of the Restaurant, its condition, and the need for additional designs, plans, and drawings, if applicable.

13.  Rent:  $4,500 to $20,000

• The figures in the table reflect Moe’s estimates for leasing the Restaurant premises and include only one month of rent. A typical Restaurant occupies about 2,200 to 2,600 square feet of space and may be located in either a freestanding building, in an in-line retail plaza space, or other non-traditional venue.

• The Restaurant requires ample parking, good visibility, and availability of prominent signage.

• In certain major metropolitan markets such as Boston, Chicago, New York, Los Angeles, San Francisco, Seattle, and Washington, D.C. and in certain other high demand districts, prevailing market rents could be significantly higher than the high estimate.

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 four weeks before and ending eight weeks after the opening of your Restaurant.

15.  Legal and Accounting Fees:  $3,000 to $10,000

• This estimate includes the cost of legal and accounting fees that you may incur in establishing your business. Such expenses may include fees payable to attorneys and accountants that you will need to use for the review of the Disclosure Document and the related agreements, as well as for entity formation and lease negotiation.

16.  Insurance:  $3,500 to $15,000

• 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, workers’ compensation, employment practices liability, cyber liability, and (if you serve alcohol) dram shop liability insurance.

17.  Miscellaneous Opening Costs/Office Supplies:  $10,000 to $25,000

• This includes office supplies and other miscellaneous opening expenses, such as utility costs, business licenses and permits, opening assistance, and the cost of training your employees.

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

• This estimate includes the cost of deposit expenses to obtain utility services, which includes deposits to initiate telephone, gas, electricity, water, and other services. These costs will vary due to municipality requirements, local provider requirements, and your creditworthiness. These deposits are generally refundable depending on the provider’s policies.

• This estimate does not include any security deposit under any lease for the Restaurant.

19.  Travel and Living Expenses During Training:  $5,000 to $30,000

• This estimate is for the cost of two people to attend the Management Training Program in Atlanta, Georgia. You are responsible for the travel and living expenses, wages, and other expenses incurred by your trainees during the program. Your actual cost will depend on your point of origin, method of travel, class of accommodations, and dining choices.

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

• You must purchase an opening inventory of food and paper products, which will vary in cost based on the size, location, and projected sales of your Restaurant.

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

• This estimates the additional funds you may need to cover expenses you will incur before your Restaurant opens and in its first three months of operation.

• These expenses may include, without limitation, employee salaries, wages and benefits, payroll taxes (including payroll to cover the pre-opening training period for your staff), Royalty Fees, Advertising Contributions, additional advertising expenses, additional inventory, miscellaneous supplies and equipment, rent, bank charges, state tax and license fees, deposits, prepaid expenses, owner background checks, and other miscellaneous items.

22.  Total Initial Investment:  $457,400 to $911,500

• These figures are based on Moe’s experience franchising Restaurants and its affiliate’s experience opening and operating Restaurants.