Detailed Estimates of Max Brenner Franchise Costs Based on Item 7 (Estimated Initial Investment) of Max Brenner’s 2014 Franchise Disclosure Document
- The franchise offered is to operate a chocolate bar under the Max Brenner name that engages in the on-site and take away sale of hot and cold chocolate-themed beverages, sweets, pastries, and desserts, and retail sale of prepackaged and loose chocolate.
1. Initial Franchise Fee: $35,000
2. Real Estate/Rent: Not Included
- A Max Brenner Business occupies approximately 2,500 to 2,800 square feet of space. Rent depends on geographic location, size, local rental rates, businesses in the area, site profile, and other factors, and could be considerably higher in large metropolitan areas.
- Max Brenner Businesses can be located in strip shopping centers, freestanding units, and other venues in downtown commercial areas and in residential areas. Max Brenner anticipates that you will rent the premises of your Franchised Business.
3. Utility and Security Deposits: $1,000 to $2,000
4. Leasehold Improvements: $265,000 to $305,000
- Leasehold improvement costs, including floor covering, wall treatment, counters, ceilings, painting, window coverings, electrical, carpentry and similar work, and architect’s and contractor’s fees, depend on the site’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; the build-out required to conform the site for your Franchised Business; and any construction or other allowances the landlord grants.
- The lower figure assumes that you remodel an existing restaurant or cafe, the higher figure assumes construction of a new space.
5. Computer System (Hardware and Software): $40,000 to $50,000
- This estimated cost of computer hardware and software necessary to operate your Franchised Business is based on point-of-sale cash register systems, printer, fax machine, internet access, customer service feedback systems, accounting software, security systems, “media wall” system, etc., including all required hardware.
- Actual costs may vary depending on the number of workstations and the vendor(s) from which you choose to purchase your computer and software.
6. Furniture, Fixtures, and Equipment: $200,000 to $250,000
- These amounts are for equipment for the Franchised Business, including tables, chairs, work tables, espresso machines, chocolate machines, ovens, refrigerators, freezers, small wares, and stereo system.
7. Signage: $25,000 to $60,000
- The cost of signs may vary depending on the type, number, size, and location of the signs, and the requirements of the landlord.
- The location of some Max Brenner Businesses may require additional signs and design work that may increase the costs beyond the estimate in this category. Also, some franchisees may request additional signage that may increase the costs beyond the estimate in this category.
- Exterior signage is frequently restricted by lease covenants and local zoning requirements, and is subject to permits.
8. Professional Fees: $12,000 to $20,000
- You may wish to employ an attorney, accountant, or other consultant in connection with your Franchised Business. These fees may vary, depending on the locality, the extent of the review required, and the local circumstances (e.g. whether an application for rezoning is necessary).
9. Architectural or Engineering Fees: $30,000 to $40,000
- You must employ a qualified, licensed architect or engineer to prepare preliminary and final plans and specifications for the premises, for Max Brenner’s approval, in accordance with its standard plans.
10. Office Equipment and Supplies: $5,000 to $10,000
- This includes a small desk and chair, safe, adding machine, printer, fax machine, and telephone system.
11. Business Licenses and Permits: $10,000 to $15,000
- Local, municipal, county, and state regulations vary on what licenses and permits you must have in order to operate your Franchised Business. Such fees are paid to governmental authorities when incurred before commencing business.
12. Opening Inventory and Supplies: $25,000 to $30,000
- This includes food and beverage products (including chocolate), paper products, cleaning supplies, and printing and other supplies.
13. Grand Opening Marketing: $50,000 to $60,000
- You are not required to spend a specific amount on grand opening marketing. The estimates given here are the amounts Max Brenner recommends.
14. Training Expenses: $100,000 to $110,000
- Max Brenner will provide an initial 10-day Chocolate Immersion training program for up to 10 employees, including the manager, of your Franchised Business at no charge to you and before the date of opening of your Franchised Business.
- Max Brenner will also provide 5 days of pre-opening training at your Franchised Business at no charge to you.
- The training costs estimated are for airfare, rental car, hotel, and meals, but do not cover such other items as salaries of employees attending training.
15. Insurance: $2,000 to $8,000
- You must obtain and maintain certain types and amounts of insurance. The estimate contemplates insurance costs for 3 months.
16. Additional Funds – 3 Months: $340,050 to $360,050
- This item estimates your initial start-up expenses (other than the items identified separately in the table). The estimate of expenses is based on Max Brenner’s experience developing Max Brenner Businesses. These expenses include payroll costs but not any draw or salary for you.
- These figures are estimates and Max Brenner cannot guarantee that you will not have additional expenses starting the business.
17. Total Estimated Initial Investment (excluding real estate costs): $1,140,050 to $1,360,050