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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Figaro’s Pizza Franchise Costs (2015 FDD)

by Franchise Chatter on April 8, 2015

in Franchise Costs, Pizza Franchises

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Figaro's Pizza Box

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

1.  Initial Franchise Fee:  $5,000 to $52,500

  • The Initial Franchise Fee ranges from $5,000 to $52,500, depending on whether you purchase a Standard, Express, Co-Branding, Retail Premises, or additional franchise.

2.  Franchise Coordination Fee:  $0 to $10,000

  • Figaro’s provides assistance to franchise owners in opening their first Franchised Store as efficiently as possible. It will assist you in ordering a complete equipment package. It will obtain site location modeling services on your behalf from independent sources.
  • In addition, Figaro’s may, at its sole discretion, determine that on-site inspection is appropriate under the circumstances prior to granting approval of a site location. If so determined, it will perform the on-site inspection at no additional cost to you for up to one site as part of the Franchise Coordination Fee.
  • You will pay to the franchisor $10,000, which is in addition to the Initial Franchise Fee, for this assistance upon signing the Franchise Agreement for the first Franchised Store you purchase.

3.  Grand Opening Advertising:  $12,500

  • Figaro’s will use these fees exclusively for the development and production of advertising within and around your Designated Area and for the primary benefit of you for a period that may be as short as 21 days and as long as approximately 60 days after you open your Franchised Store.
  • You will be shipped a number of promotional expendables, paid for by your Grand Opening Fund, that are necessary to open your store. They include banners, labels, posters, point-of-sale materials, balloons, product photos, frequency cards, and similar promotional materials. These cost approximately $2,000 to $2,500 and will be shipped via UPS to your home address.
  • The remaining approximately $10,000 will be expended towards media, printing, and other opening period advertising in your local market.

4.  Lease Acquisition:  $2,000 to $6,000

  • Typical locations for Figaro’s are shopping centers or other commercial retail areas. The franchisor recommends 1,000 to 1,700 square feet and it requires a minimum of 960 square feet for a Standard franchise (normally less for Express and some Co-Branding franchises).
  • Typically, you must pay the first and last months’ rent in advance, so Figaro’s estimates the initial expense will be $2,000 to $6,000.

5.  Leasehold Improvements:  $42,000 to $98,000

  • The range of figures set forth for a Franchised Store is the cost of reasonable renovation or leasehold improvements, and may be less if the lessor provides a construction allowance to lease.
  • This includes plumbing and electrical work, possibly a drive-up window, and other interior decorating before opening the store.
  • Recent experience suggests that a full size typical Figaro’s store can expect total leasehold improvement costs of $42,000 to $98,000.

6.  Equipment and Fixtures:  $20,000 to $113,000

  • Figaro’s will provide you with a list of all necessary equipment and fixtures which currently may include, depending on the type of franchise purchased, a point-of-sale computer system, mixer, dough roller, walk-in coolers, freezer, ovens, exhaust systems, and miscellaneous small wares.
  • Fixtures include cabinets, shelves, and counters.
  • This estimate includes installation.

7.  Opening Inventory:  $5,000 to $8,000

  • Initial inventory includes various food products, the Trade Secret Food Products, beverages, paper products, cleaning supplies, and other supplies utilized in the operation of the store as well as other merchandise or products sold by the store.
  • This estimate is for the opening inventory of food and other supplies.

8.  Training:  $500 to $5,000

  • There is no separate charge for the training itself, but you must pay for the travel and living expenses of the persons attending the training program.
  • The training program will be held for a minimum of two 6-day weeks at an existing store selected by the franchisor. The training program is offered for up to two persons.

9.  Signs:  $4,500 to $11,000

  • This estimate is for a lighted logo sign and neon signs, which must conform to Figaro’s specifications and be installed before the store opens.
  • The low estimate assumes that you will use a smaller, low-end sign while the $11,000 estimate assumes a larger, high-end sign.

10.  Delivery Vehicles:  Amount Not Specified

  • Franchised Stores offering delivery are not required to provide delivery vehicles, but instead are expected to rely on employee-owned vehicles.
  • If you acquire your own vehicles, costs will vary depending upon the type of vehicle and whether it is owned or leased.

11.  Additional Funds:  $15,000 to $35,000

  • The disclosures in this table represent anticipated costs and expenses to open and operate your franchise during its initial three months of operation.

12.  Miscellaneous:  $16,500 to $38,450

  • Miscellaneous expenses include telephone and other utility installations and deposits, licenses and permits, registration fees, architectural services, blueprints, uniforms, menus, opening till, office and cleaning supplies, office desk and chair (if any), office computer and any related equipment, and other miscellaneous items.
  • Figaro’s has included $6,000 to cover sales taxes, $3,500 to cover freight, and $4,500 to cover set up and installation in its high estimate.
  • The estimate includes an initial premium payment of $500 before the Figaro’s store opens.

13.  Total:  $123,000 to $398,450

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