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Franchise Costs: Detailed Estimates of Earl of Sandwich Franchises Costs (2014 FDD)

by Franchise Chatter on June 14, 2014

in Franchise Costs, Sandwich Franchise

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Earl of Sandwich Photo by Prayitno

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

  • Earl of Sandwich Restaurants may be developed as in-line, end cap, or free-standing locations. Since the franchisor has limited experience in developing free-standing Earl of Sandwich Restaurants, the figures below reflect the estimated initial investment for an Earl of Sandwich Restaurant located at an in-line or end cap location.
  • If you plan to develop an Earl of Sandwich Restaurant in a free-standing location, the real estate, building, and site improvement costs are likely to be significantly higher than what is included in this Item 7.

1.  Initial Franchise Fee:  $25,000

2.  Grand Opening Required Spending:  $5,000

  • At least 60 days prior to the opening of a Franchised Restaurant, you must submit a Grand Opening Required Spending Plan to Earl of Sandwich outlining your proposal for grand opening advertising of the Franchised Restaurant. You must obtain Earl of Sandwich’s consent to the Grand Opening Plan before you begin to implement it.
  • You must, during the period beginning 30 days before the scheduled opening of the Franchised Restaurant and continuing until 60 days after the Franchised Restaurant first opens for business, spend at least $5,000 to conduct grand opening advertising under the Grand Opening Plan.
  • Within 10 days after the end of this period, you must submit proof of your grand opening advertising expenditures to Earl of Sandwich.

3.  Real Property:  Variable

  • The franchisor expects that you will lease the location for the Franchised Restaurant, which will vary in size from 1,500 to 2,800 square feet for an in-line or end cap location, and 2,500 to 4,000 square feet for a free-standing location.
  • You may be required to pay the first and last months’ lease payment upon signing your lease agreement. Lease agreements may include the following expenses:  taxes, insurance, maintenance, fixed rent (with escalations), percentage rent, and other charges related to the operation of the Franchised Restaurant.

4.  Building and Site Improvements:  $50,000 to $335,000

  • The franchisor estimates that building and site improvement costs, including permits and municipality fees, will range from $52 to $154 per square foot or more depending upon the condition of the property and local regulatory requirements.

5.  Furnishings, Fixtures, and Equipment:  $63,500 to $110,000

  • You must purchase certain items of furniture, fixtures, equipment, and smallwares as required by the Franchise Agreement and the Manual. You may be able to lease from or finance through a third party a portion of these purchases, but you should expect to make a down payment of up to 40%.

6.  Signage:  $7,500 to $20,000

  • The type of signage installed is governed by local ordinances regarding height and size restrictions. The typical sign package includes a minimum of one large exterior facial sign, one exterior banner sign, menu boards, marked awnings, interior and directional signage package.

7.  Point of Sale System:  $15,000 to $30,000

8.  Art and Decor Items:  $5,000 to $15,000

  • Required art and decor items include:  interior and exterior art plans, wall treatments, prints, and pictures as specified in the Manual.

9.  Professional Fees:  $600 to $2,200

  • These figures represent the estimated costs of engaging an attorney or other business professionals to review this disclosure document and the accompanying agreements, assist you in organizing a business entity, and help you obtain required licenses and permits.

10.  Initial Manager Training:  $4,000 to $6,000

  • These costs include transportation, lodging, food, and other incidental expenses for you and your employees during training.

11.  Pre-Opening Costs:  $10,000 to $20,000

  • These costs include utility deposits, installation of telephones, data transfer lines, business licenses, uniforms, office and cleaning supplies, and other prepaid expenses. It also includes a range of $6,500 to $15,000 for the initial inventory of food and paper.

12.  Liquor Licenses:  Variable

  • Earl of Sandwich cannot estimate the cost to obtain a liquor license, if required, since it varies greatly from jurisdiction to jurisdiction depending on the licensing authority involved and the local liquor license resale market, if any.
  • Some states limit the available number of liquor licenses. In such markets, you are likely to be required to pay grossly inflated prices on the secondary market to obtain a liquor license.

13.  Additional Funds – 3 Months:  $9,000 to $15,000

  • These figures are an estimate of the additional funds that you may require for operating expenses during the initial three months of business. They include payroll, taxes, insurance, food, paper, supplies, utilities, licenses and permits, bank charges, and repair and maintenance expenses.
  • They do not include advertising or royalty payments made to the franchisor.
  • These figures are estimates, and Earl of Sandwich cannot guarantee that you will not have additional expenses starting the business.

14.  Total Estimated Initial Investment:  $194,600 to $583,200

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