Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of PizzaRev Franchise Costs (2017 FDD)

by Franchise Chatter on May 1, 2014

in Franchise Costs, Pizza Franchises

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This post was updated on August 6, 2017 to reflect information from PizzaRev’s 2017 FDD (Item 7).

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

  • For the estimated range of costs, PizzaRev relied on the historical operations of the PizzaRev Restaurants owned and operated by Pie Squared Pizza and its experience in the offer and sale of franchised PizzaRev Restaurants.
  • Payments are not refundable unless otherwise noted. PizzaRev does not offer direct or indirect financing.

1.  Initial Fee:  $30,000

2.  Leasehold Improvements:  $215,000 to $574,000

  • These estimated costs are to remodel an existing building or space to meet the image and decor requirements for PizzaRev Restaurants. Costs for leasehold improvements will vary greatly, depending upon the location, condition, layout and content of the site, labor costs, material costs, and other economic factors.

3.  Lease Payments – 3 Months:  $12,000 to $36,000

  • PizzaRev Restaurants will typically be located on pad sites or in end cap or wide-frontage in-line spaces and require from 1,800 to 3,000 square feet of floor space.
  • A food court site may be considered, and the estimated initial costs associated with this option are included in the estimated dollar amounts disclosed in this Item.
  • The cost per square foot of leasing commercial property will vary considerably depending upon location and market conditions, and can range from $2.00 to $8.50 per square foot.
  • This estimate does not provide for the purchase of land or the construction of a building.

4.  Wages, Travel, and Living Expenses for You and Your Management Staff During Training:  $3,000 to $8,000

  • You must pay for the salaries and benefits, travel expenses, and other expenses while you and your management staff attend the training program.

5.  Furniture, Fixtures, Supplies, Inventory, Decor, and Equipment:  $156,750 to $325,000

  • This includes the cost of kitchen and bar equipment, registers, booths, bars, small wares, office equipment, and supplies. Your furniture, fixtures, supplies, inventory, decor, and equipment may be financed through a bank or other financial institution, leased, or purchased outright.

6.  Architectural, Engineering Fees:  $11,000 to $34,000

7.  Signage:  $18,000 to $31,500

8.  Point-of-Sale and Computer System:  $12,750 to $14,000

  • This includes the cost to purchase and install the computer hardware, peripherals, and software that will serve as the point-of-sale computer system for your Restaurant, and the maintenance agreement for that system.

9.  Liquor License Costs:  $1,500 to $17,500

  • Liquor license costs will generally range from $1,500 to $17,500. However, in isolated instances, you may have to pay an amount that is substantially higher for a liquor license.
  • You must check with the local licensing regulatory agency to determine the cost of your liquor license.

10.  Insurance Premiums – 3 Months:  $3,000 to $3,500

11.  Employee Salaries – 3 Months:  $12,000 to $22,000

  • This estimate includes the salaries and benefits for you and your management staff during training.

12.  Miscellaneous:  $1,000 to $7,500

  • Miscellaneous fees include such items as security deposits, utility and license deposits, impact fees, commissions, permits, miscellaneous professional fees to acquire or lease the premises of your Franchised Location, and other accounting and legal fees.

13.  Grand Opening:  $7,500 to $25,000

  • PizzaRev recommends that you spend at least $15,000 on the grand opening of your Restaurant. However, if your Restaurant is located in a market area that already has an operational PizzaRev Restaurant (or other relevant circumstances exist that may affect your promotional efforts in your market area), then with the prior approval of PizzaRev to a lower minimum required grand opening advertising amount, you may spend less than $15,000 for grand opening advertising for your Restaurant.
  • Your expenditures for grand opening advertising may exceed $15,000 if your Restaurant is the first PizzaRev Restaurant in the market area.

14.  Additional Funds – 3 Months:  $5,000 to $15,000

  • During the first three months of operations, you will need additional funds to cover your expenditures for food and beverage inventories, fees due under the Franchise Agreement, local advertising, utilities, office and other supplies, and other miscellaneous operating costs.
  • Your estimated additional funds have not been offset by any allowance for your operating revenues during this three-month period. You may need additional funds during the first three months of operation and afterwards.

15.  Total:  $489,000 to $1,142,500

  • These figures are estimates only, and it is possible that you may have additional or greater expenses during this period.

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