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Franchise Costs: Detailed Estimates of Beef Jerky Outlet Franchise Costs (2015 FDD)

by Franchise Chatter on November 20, 2014

in Franchise Costs, Retail Franchise

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The Beef Jerky Outlet

This post was updated on August 30, 2015 to reflect information from Beef Jerky Outlet’s 2015 FDD (Item 7).

Detailed Estimates of Beef Jerky Outlet Franchise Costs Based on Item 7 (Estimated Initial Investment) of Beef Jerky Outlet’s 2015 Franchise Disclosure Document

1.  Initial Franchise Fee:  $39,900

  • The initial franchise fee does not include any discount for which you may qualify.
  • The Office of the Illinois Attorney General has imposed a deferral requirement due to the Franchisor’s financial condition. Initial Franchise Fees are deferred until 1) Franchisor’s obligations to assist franchisee in establishing his/her franchise business are fulfilled, and 2) franchisee has commenced doing business.

2.  Rent – 3 Months:  $6,000 to $30,000

  • If you do not own adequate or appropriate space, you must build or lease the space for your Store. Beef Jerky Outlet’s estimates assume that you will lease the space for your Store.
  • The typical space for a Beef Jerky Outlet Store ranges from 1,000 to 1,800 square feet. Rents will vary depending upon factors including size, condition, and location of the leased premises, the local real estate market conditions, and competition for the leasable space.
  • The estimate in the chart includes the first three months of rent. In addition, some landlords may require additional security deposits or rental payments when you sign a lease.

3.  Leasehold Improvements:  $25,000 to $50,000

  • Your leased space will need leasehold improvements to meet the then-current image for all Beef Jerky Outlet Stores. The leasehold improvements may include flooring, wall coverings, and the like.
  • The actual cost of your leasehold improvements will depend on labor rates for the area in which your Store is located, whether you must use union labor, the condition of the leased premises, how much the premises must be renovated, and the cost of building materials.
  • The low end of the estimate assumes that your landlord will provide a partial build-out allowance, but the franchisor does not guarantee that you will be able to negotiate any kind of tenant improvement allowance.
  • The estimate also includes the costs for any blueprints or construction plans you must have.

4.  Equipment, Furnishings, and Fixtures:  $25,000 to $50,000

  • You must purchase and/or lease and install furniture, fixtures, and equipment necessary to operate your Store. Installation charges for equipment are included in the estimates.
  • The cost of the furniture, fixtures, and equipment will vary according to local market conditions, suppliers, and other related factors. The typical furniture, fixtures, and equipment you will need include a check-out counter, display racks, bulk food barrels, and refrigerators.

5.  Signage:  $5,000 to $15,000

  • You must obtain the interior and exterior signage the franchisor requires for your Beef Jerky Outlet Store. All signage must comply with the terms of your lease and applicable local law.

6.  Initial Inventory:  $30,000 to $50,000

  • This estimate includes the inventory of retail food products, specialty food products, and other merchandise, as well as shopping bags, bulk food bags, and similar items.

7.  Security Deposits:  $2,000 to $10,000

  • This estimate assumes that you will need to pay a security deposit to your landlord for the leased space, and that your local utility companies (such as electric and telephone) require security deposits.

8.  Insurance – 3 Months:  $750 to $3,000

  • You must maintain the insurance that the franchisor requires during the entire term of the Franchise Agreement. Your insurance premiums may be payable monthly, quarterly, semi-annually, or annually, depending on your insurance company’s practices.

9.  Grand Opening Advertising:  $5,000 to $10,000

  • You must conduct a grand opening advertising program to promote the opening of your Beef Jerky Outlet Store. Your grand opening advertising program must be conducted within your first 90 days of operation.
  • The grand opening advertising program must be approved by the franchisor before you may run with it, and must include the print advertising, flyers, free samples, and giveaways that the franchisor requires.
  • The sum of $5,000 for your grand opening advertising campaign must be paid to marketing vendors on signing your agreement, or paid to the franchisor at its request and it will conduct the campaign for you.
  • It may cost up to $10,000 in total for your grand opening events depending on location and circumstances unique to your store.

10.  Travel and Living Expenses While Training:  $2,000 to $5,000

  • The franchisor will provide its initial training program to you or your Designated Manager while attending training. Your actual costs will depend on the distance you must travel, the total number of people attending training, and the accommodations you choose.

11.  Office Equipment and Supplies:  $2,500 to $3,500

  • You must purchase general office supplies, including stationery, business cards, and basic office equipment.

12.  Permits/Licenses:  $100 to $500

  • You must obtain the operational and professional licenses and permits required by applicable local and state law. All required licenses and permits must be in place and in good standing at all times during the term of your Franchise Agreement.

13.  Professional Fees:  $1,000 to $2,500

  • The franchisor strongly advises you to consult with your own financial and legal advisors, and it anticipates that you will incur professional fees related to your evaluation of this Disclosure Document. If you choose to form an entity for your business, you may incur additional legal fees and expenses that the franchisor cannot estimate here.

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

  • This item estimates your initial start-up expenses (other than the items identified separately in the table) for the initial period of operations of your Store, which the franchisor estimates to be three months.
  • These expenses include payroll costs, Royalty Fees, and Marketing Fees, but the franchisor has not included any revenue that your Store might generate.
  • These figures are estimates, and the franchisor cannot guarantee that you will not have additional expenses starting the business.

15.  Total:  $159,250 to $299,400

  • Beef Jerky Outlet relied on its affiliate’s experience since 2006 in developing and operating Beef Jerky Outlet Stores to compile these estimates.
  • The franchisor does not offer financing directly or indirectly for any part of the initial investment.

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