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Franchise Costs: Detailed Estimates of Bowl of Heaven Franchise Costs (2015 FDD)

by Franchise Chatter on November 4, 2014

in Franchise Costs, Smoothie Franchise

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Bowl of Heaven PhotoThis post was updated on December 22, 2015 to reflect information from Bowl of Heaven’s 2015 FDD (Item 7).

Detailed Estimates of Bowl of Heaven Franchise Costs Based on Item 7 (Estimated Initial Investment) of Bowl of Heaven’s 2015 Franchise Disclosure Document

  • The Bowl of Heaven franchise is a license to independently own and operate a single nutritional cafe providing proprietary Acai bowls, unique juice blend smoothies, fresh squeezed juices, protein powders, snack bars, specialty condiments and ingredients, and other food, beverages, and related products and accessories to retail customers.

1.  Initial Franchise Fee:  $30,000

  • This fee must be paid in full at the time indicated.
  • In order to be eligible to sign the Franchise Agreement, you must provide Bowl of Heaven with reasonable proof of your financial ability to make the initial investment described below and you must authorize Bowl of Heaven to conduct a credit check to confirm your financial ability to purchase and develop the Outlet.

2.  Project and Construction Management Fee:  $5,000

3.  Grand Opening Advertising:  $2,500 to $5,000

  • You must spend at least $2,500 within the first 60 days to build local customer awareness of your Outlet.
  • Recommendations on how to promote the grand opening of your Outlet will be provided by Bowl of Heaven, including promotional ideas, sample advertising copy, and flier design.

4.  Training Expenses:  $2,500 to $7,500

  • Training typically is accomplished in 5 to 6 days in Orange County, California followed by 5 or more days of assistance by Bowl of Heaven’s “Opening Team” at the time your Outlet opens.
  • These expenses represent (i) the wages, travel, and living expenses for you and your staff during training and (ii) reimbursement for the expenses of the Bowl of Heaven Opening Team.

5.  Lease, Utility, and Security Deposits:  $3,000 to $6,000

  • You will need to rent a suitable retail site for your Outlet and the rent or lease deposit amount will vary depending on the location.
  • A security deposit and first month’s rent are standard requirements to enter into a commercial lease, and the estimate above includes 3 months of rent and the deposit.

6.  Leasehold Improvements:  $40,000 to $195,000

  • You will need to conduct the necessary build-out of your leased space according to Bowl of Heaven’s requirements. Outlets are generally located in in-line shopping centers and require approximately 900 to 1,500 square feet of floor space. The cost for leasehold improvements will generally be between $100 and $130 per square foot.
  • The amounts listed in this type of expenditure are estimates that are based on basic build-out of Bowl of Heaven’s Outlet design but do not include many variables related to the pre-existing condition of any one location.
  • The cost of your build-out may be reduced by a Tenant Improvement (TI) allowance or rebate from the landlord, which varies depending on the terms of each lease agreement. However, you will be required in most cases to complete the build-out, and satisfy all related invoices to contractors and service providers in order to qualify for the TI rebate from the landlord.
  • The costs of architectural drawings and building permits are included in these estimates.
  • Real estate and TIs (if any) related to “conversions” would be substantially lower.

7.  Furniture, Fixtures, and Other Fixed Assets:  $12,000 to $50,000

8.  Equipment:  $35,000 to $70,000

  • Equipment and operational materials you will need to purchase include commercial juice blenders, pulp extractors, refrigerator, freezer, prep tables, hand sinks, ice bin, as well as a point of sale (“POS”) system, business computer, printer, printed materials (such as business cards and brochures), referral gifts, and promotional items.
  • The cost of equipment ranges from $18,000 to $30,000. The cost of the POS system, computer, printer, and other operational materials ranges from $6,000 to $11,500. The cost of other equipment ranges from $29,000 to $58,500.

9.  Signage and Menu Board:  $9,000 to $18,000

  • The quantity, size, type, and cost of signs will vary substantially per lease space and in accordance to stipulations of each landlord and local government regulations. These estimates include the average filing fees for obtaining the necessary sign permits.

10.  Insurance:  $1,000 to $3,000

  • The currently required minimum coverage and limits of insurance are (i) general liability insurance with limits of at least $1,000,000 per occurrence and $2,000,000 aggregate and (ii) workers’ compensation insurance to meet the statutory coverage of the state where your Outlet is located.

11.  Inventory to Begin Operating:  $4,000 to $15,000

  • This refers to the initial inventory of Bowl of Heaven Products and other authorized products to be sold in the Outlet, operational materials, and other items of merchandise and supplies you must stock in order to open for business.

12.  Professional Fees and Miscellaneous Opening Costs:  $2,500 to $4,000

  • This includes professional legal and accounting fees to review the franchise and set up the Outlet, business licenses, and other prepaid expenses.

13.  Additional Funds – 3 Months:  $15,000 to $30,000

  • Although Bowl of Heaven does not require minimum funds for you to start your business, there are some expenses you will incur when you begin your franchise operations, such as inventory, supplies, and employees. It is always a good idea to have some cash reserves available to cover initial operating expenses.
  • This estimates the additional funds you will need for your first 3 months of operation. These expenses include payroll costs.
  • These figures are estimates and Bowl of Heaven cannot guarantee that you will not have additional expenses during your first 3 months of operation.
  • Bowl of Heaven relied on the 3 years of experience of its president in determining these figures.

14.  Total:  $161,500 to $438,500

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