Teriyaki Madness Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

For a Single Franchise

• The estimated expenditures shown below are for the development and opening of your first Teriyaki Shop.

1.  Initial Franchise Fee:  $45,000 to $150,000

• If you purchase a Single Franchise, the Initial Franchise Fee will be $45,000. If you purchase a Standard Franchise, the Initial Franchise Fee will be $99,000 ($33,000 per Teriyaki Shop). If you purchase a Platinum Franchise, the Initial Franchise Fee will be $150,000 ($30,000 per Teriyaki Shop).

• If you purchase a Custom Franchise, the Initial Franchise Fee will be an amount that Teriyaki Madness will determine on a case-by-case basis and is, accordingly, not reflected in the range above.

• See Item 5 for more details, including the 15% discount off the Initial Franchise Fee available to active-duty service members and honorably discharged veterans.

2.  Shop Opening Assistance Fee:  $27,500

• The Shop Opening Assistance Fee is $27,500 for the first Teriyaki Shop that you purchase.

• If you purchase a Multi-Unit Franchise, the Shop Opening Assistance Fee for the second and each additional Teriyaki Shop is optional and will be payable only if you request that Teriyaki Madness provide Shop Opening Assistance for the applicable shop.

3.  Site Investigation:  $1,000

• All sites are required to have a site investigation prior to lease signing. The estimated cost is $1,000 per location.

4.  Site Survey:  $2,000 to $5,000

• All sites are required to have a CAD format site plan and PDF format “As Built” drawings provided to the Design & Construction Department at least 30 calendar days prior to lease signing or will require a full site survey prior to lease signing. Estimated cost for a site survey is between $2,000 and $5,000 per location, if these costs are not covered by your landlord.

5.  Rent, Security Deposit, Utility Deposit:  $7,000 to $13,000

• The low estimate anticipates that your rent commencement date will start approximately 120 to 150 days after you take possession of the Teriyaki Shop and provides for rent payment for one month, an initial security deposit, and a utility deposit.

• The high estimate assumes you take possession of the Teriyaki Shop immediately and includes three months for rent payment.

• Teriyaki Madness anticipates that a typical Business will need between 1,200 and 1,800 square feet of space, and it estimates lease rates to range between $2.00 and $4.25 per square foot per month.

• There are a variety of factors that can affect lease rates, the most prominent being location and market conditions.

• In addition, most leases are triple net leases which require the tenant to pay rent plus all taxes, insurance, and maintenance expenses, while other leases may charge a variable rent based on a percentage of your income, with no fixed minimum rental charge. This estimate does not account for triple net expenses or other amounts beyond the base rental rate.

• You should investigate lease rates in your own area.

6.  Permit Expeditor:  $1,000 to $2,000

• All sites will require a permit expeditor within 10 business days of lease signing. The estimated cost is between $1,000 and $2,000 per location.

7.  Leasehold Improvements:  $100,000 to $260,000

• The low estimate shown assumes the space does not require additional HVAC, ventilation, plumbing, electrical, gas, restrooms, or grease traps. You may be able to negotiate with your landlord for a significant landlord contribution for these expenses.

• In a build-to-suit lease, the landlord typically includes some or all of the improvements and fixtures in your lease payments. The costs may go up if the landlord does not provide what Teriyaki Madness requests in its standard work letter or the landlord does not provide an adequate allowance to cover these improvements.

• The high estimate is a new space with no landlord contributions for tenant improvements reflected in the estimate.

• The estimate involves expenses associated with the design and build-out of the Teriyaki Shop, such as plumbing, electrical, and remodeling work and are based on Teriyaki Madness’s experience with existing franchisees.

• These costs may vary significantly depending on the size, condition, and location of the leased premises, supply and demand for materials and labor in your local area, local building and fire code requirements, and requirements of the lease regarding such matters as construction, signage, and inflation.

• The costs vary with factors such as Teriyaki Madness Business size and type, configuration, remodeling needs, and location.

8.  Furniture, Fixtures, and Equipment:  $90,000 to $170,000

• This estimate involves the furniture, fixtures, and equipment you will need to open a Teriyaki Madness Business, such as chairs, tables, casework, refrigerators, freezers, grills, a range, a deep fryer, exhaust hood, and other items. Some of these expenses will depend on the size of your Teriyaki Madness Business, shipping distances, whether any equipment in the space can be utilized, and your credit history.

9.  Architect:  $11,500 to $15,000

• You must prepare architectural and construction drawings, designs, and site plans using Teriyaki Madness’s required architects. The estimated cost is between $11,500 and $15,000 per location.

10.  Initial Inventory and Supplies:  $12,500 to $17,000

• You must have Teriyaki Madness’s required opening inventory and supply items on hand, including smallwares and other service items, when you begin the on-site training of your Teriyaki Madness Business. You must purchase the initial inventory and supplies from Teriyaki Madness’s approved suppliers.

• Some of this inventory will be used during your on-site training in order to provide simulations for you and your staff before serving to the public.

11.  Insurance:  $1,500 to $5,000

• You must obtain and maintain certain types and amounts of insurance, as specified in Item 8.

12.  Business Licenses and Permits:  $500 to $9,860

• You must obtain all necessary permits and licenses required by applicable law before you begin operation of the Teriyaki Madness Business.

13.  Professional Fees:  $2,500 to $4,000

• Teriyaki Madness strongly recommends that you hire a lawyer, accountant, or other professional to advise you on this franchise offering. Rates for professionals can vary significantly based on area and experience.

14.  Signage:  $9,000 to $23,900

• The estimate is the cost of the interior and exterior signs you will need for your Teriyaki Madness Business. This includes the entire décor package, including posters, menu boards, wall paper murals, and vinyls, and can vary depending on signage requirements for your city, landlord policies, and available space on the building.

15.  Security and Music System:  $1,600 to $2,000

• You must purchase and install a security system that meets Teriyaki Madness’s standards and specifications ($375-$675); a camera and monitoring system that meets Teriyaki Madness’s standards and specifications ($1,200-$1,600); and a music and speaker system that meets Teriyaki Madness’s standards and specifications ($380-$700).

• The costs in the chart above reflect the cost to procure and install the required equipment from Teriyaki Madness’s preferred vendors. The range of costs depends on the size and layout of the location.

16.  Office Equipment and Supplies:  $12,000 to $15,000

• You must purchase Teriyaki Madness’s approved point-of-sale system from Teriyaki Madness’s approved supplier, a computer, business stationery, and certain other related items necessary to operate and manage the Teriyaki Madness Business.

17.  Grand Opening Promotion:  $10,000

• You must spend at least $10,000 on the required grand opening advertising campaign, as Teriyaki Madness’s marketing department specifies for your Teriyaki Shop.

18.  Uniforms:  $600 to $1,000

• You are required to have at least 1 clean apron per employee per shift. You are also required to have 1 hat per employee, 2 shirts for each part-time employee, and 4 shirts for each full-time employee. You must purchase uniforms from Teriyaki Madness’s approved suppliers.

19.  Initial and Hands-On Training Expenses:  $1,200 to $4,500

• This estimates the expense you will incur in sending 2 individuals to Teriyaki Madness’s initial training and hands-on training programs, including travel expenses. Teriyaki Madness does not charge a fee for initial training or hands-on training.

• These estimates do not include any salary or wages you may pay to any of your trainees for the time they spend in training.

20.  Opening Extension Fee:  $0 to $3,000

• If you fail to open your Teriyaki Shop within 53 weeks of the effective date of the Franchise Agreement or the applicable Teriyaki Shop Rider, you will be required to pay Teriyaki Madness an Opening Extension Fee of $250 per week until the Teriyaki Shop is open.

• The low estimate assumes you open within 53 weeks, and the high estimate assumes a 12-week extension.

21.  Additional Funds – 3 Months:  $10,000 to $30,000

• This estimates your initial startup expenses (other than the items identified separately above) and is based on Teriyaki Madness’s experience, the experience of its affiliates, and its current requirements for Teriyaki Madness Franchises. These figures are estimates, and Teriyaki Madness cannot guarantee that you will not have additional expenses starting the Business.

• Your costs depend on how closely you follow Teriyaki Madness’s methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market for your services and products; the prevailing wage rate; competition; and the sales level reached during the initial period.

• These estimates are based on an initial period of 3 months.

22.  Total:  $346,400 to $768,760

• Teriyaki Madness has relied on the experience of its affiliates, predecessor, and officers to arrive at these estimates. Your actual costs may vary. You should review these figures carefully with a business advisor before deciding to acquire the franchise.

• Teriyaki Madness does not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing depend on many factors, including the availability of financing generally, your creditworthiness and collateral, and lending policies of financial institutions from which you request a loan.