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Franchise Costs: Detailed Estimates of Johnny Rockets Franchise Costs (2017 FDD)

by Franchise Chatter on March 5, 2015

in Franchise Costs, Hamburger Franchise

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Johnny Rockets Photo by Bob B. Brown

This post was updated on August 17, 2017 to reflect information from Johnny Rockets’ 2017 FDD (Item 7).

Detailed Estimates of Johnny Rockets Franchise Costs Based on Item 7 (Estimated Initial Investment) of Johnny Rockets’ 2017 Franchise Disclosure Document

For a Johnny Rockets Traditional Restaurant

1.  Initial Franchise Fee:  $49,000

2.  Architectural Design:  $15,000 to $27,500

3.  Leasehold Improvements:  $225,000 to $450,000

  • The estimated amount is prior to landlord contributions.
  • The cost of construction and leasehold improvements depends upon the size and condition of the premises, the local cost of contract work (including whether the local labor is union or non-union), the location of the Restaurant (including whether the location is in a colder climate or milder climate), and to the extent you are opening a Johnny Rockets Drive-Thru Restaurant, the requirement to install an automobile drive-thru.
  • The range of figures for a Restaurant is the cost of reasonable renovation or leasehold improvements, and may be less if the landlord provides a construction allowance to you.
  • Included in the estimate are construction charge backs for landlord-provided work.

4.  Furniture, Fixtures, and Equipment:  $200,000 to $250,000

  • The estimated cost of furniture, fixtures, and equipment includes counters, tables, chairs, and other similar materials, but the estimate does not include the:
  • (a) Interior Decor Package or signs,
  • (b) a full restaurant information and point-of-sale cash collection system (“POS System”),
  • (c) a music system, and
  • (d) smallwares (cost estimates for (a) through (d) are provided separately).
  • To the extent you will operate a Johnny Rockets Drive-Thru Restaurant, you will be required to obtain and install the designated equipment and software for the required automobile drive-thru.
  • The equipment necessary for the operation of a Restaurant includes grills, refrigerators, and other similar equipment.
  • You may purchase or lease only approved brands and models only from approved suppliers.
  • The cost of the equipment will depend on financing terms available, the size of the facility, and other factors.

5.  Interior Decor Package:  $6,000 to $10,000

  • The Interior Decor Package includes pictures, wall coverings, and other decorations as specified by the franchisor.

6.  Signs (Interior and Exterior):  $20,000 to $50,000

  • Includes all interior and exterior signs as specified and approved by the franchisor. No other signs will be allowed.

7.  Information and Technology Systems & POS System:  $17,500 to $30,000

  • Includes a full computer and POS System.

8.  Smallwares:  $15,000 to $20,000

  • Includes all flatware, drinking cups, pans, containers, kitchen utensils, and other similar items as specified by the franchisor.

9.  Initial Inventory:  $6,000 to $8,000

  • Your initial inventory may be purchased only from approved and designated products supplier or any supplier approved by the franchisor.
  • Initial inventory consists of various food products, beverages, paper products, smallwares, cleaning supplies, and other supplies utilized in the operation of the Restaurant, as well as other merchandise or products sold by the Restaurant.
  • The initial inventory expenditure will vary according to anticipated sales volume and current market prices for supplies and the menu items you offer at your Restaurant.

10.  Real Estate and Security Deposits:  $10,000 to $18,000

  • These figures include the estimated rent for the first month for a typical Restaurant, which varies in size from 500 to 3,300 square feet.
  • Security deposits or prepaid expenses are generally encountered with regard to your real property and personal property leases, insurance requirements, and utility arrangements. Security deposits and prepaid expenses are held by the respective suppliers and may sometimes be refunded under the terms of the agreements or as regulated by law.

11.  Insurance and Performance Bonds:  $2,000 to $6,000

12.  Music and Video System:  $8,000 to $25,000

  • A full Restaurant sound and video system, including table top and counter top jukeboxes as specified by the franchisor, is required.
  • To the extent you will operate a Johnny Rockets Drive-Thru Restaurant, you will need exterior video monitors and outside speakers for drive-thru entertainment.
  • No other music or video system will be permitted.

13.  Training:  $18,000 to $21,000

  • The franchisor’s Initial Restaurant Management Training Program lasts approximately four weeks and consists of 24 shifts of classroom and on-the-job training and self-study modules and applications.
  • Prior to the opening of your first Restaurant, you and one additional person designated by you as the manager or assistant manager responsible for the operation of the Restaurant must attend the Initial Restaurant Management Training Program.
  • At your option, up to two additional persons designated by you as your Restaurant managers or assistant managers may also attend Initial Restaurant Management Training Program.
  • You must make arrangements for and pay the expenses of persons attending, including transportation, lodging, meals, and wages. The amount spent will depend, in part, on the distance you must travel and the type of accommodations you choose.
  • If you send a replacement manager for any person who fails to complete the Restaurant Management Training Program to the franchisor’s satisfaction, or additional personnel, you must pay a Training Fee of $4,000 per person in addition to paying the expenses listed above.
  • In addition to the Restaurant Management Training Program described above, there is a 1-day “Serve Safe” training, provided by a third party provider, that is required for anyone classified as a Control Person or anyone in a management position.

14.  Pre-Opening Labor:  $14,000 to $22,000

15.  Grand Opening Publicity Support:  $5,000 to $10,000

  • Includes the cost of the advertising, promotion, events, and publicity purchased in support of the Grand Opening of your Restaurant.

16.  Liquor License:  $4,000 to $45,000

  • If your Restaurant sells beer and wine, it is solely your responsibility to obtain and maintain a liquor license.
  • The cost of a liquor license can be significantly higher in a few states where the number of licenses is severely restricted, or available only from an existing holder.
  • You should retain legal counsel specialized in obtaining and maintaining liquor licenses.

17.  Miscellaneous (Legal, Accounting, Licenses, Permits, Etc.):  $7,000 to $14,000

  • You must acquire various permits and licenses as required by governmental regulations and keep them in good standing and full force and effect. These may be either isolated or recurring expenditures.
  • Typical of these permits and licenses are those from health departments, fire departments, food establishment regulatory agencies (including a liquor license, if applicable), labor departments, sales tax bureaus, and other similar state or local governmental agencies.
  • Those fees are determined by governmental authorities and are paid to them directly by you.

18.  Additional Funds (Initial Period – 3 Months):  $40,000 to $60,000

  • These amounts are the minimum recommended levels to cover operating expenses, including employees’ salaries and uniforms for three months. However, Johnny Rockets cannot guarantee that this amount will be sufficient.

19.  Totals:  $661,500 to $1,115,500

  • Johnny Rockets has prepared these estimates based on its experience and that of its management team.

For a Johnny Rockets Express Restaurant

  • The total estimated initial investment necessary to begin operation of a Johnny Rockets Express Restaurant ranges from $605,500 to $988,500.

For a Johnny Rockets Drive-Thru Restaurant

  • The total estimated initial investment necessary to begin operation of a Johnny Rockets Drive-Thru Restaurant ranges from $675,500 to $1,144,000.

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