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Franchise Costs: Detailed Estimates of Qdoba Mexican Grill Franchise Costs (2015 FDD)

by Franchise Chatter on April 26, 2015

in Franchise Costs, Mexican Restaurant Franchise

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Detailed Estimates of Qdoba Mexican Grill Franchise Costs Based on Item 7 (Estimated Initial Investment) of Qdoba Mexican Grill’s 2015 Franchise Disclosure Document

  • Calculations regarding estimates for leasehold improvements, building construction, and site work are based upon restaurants of 2,200 to 2,400 square feet.
  • If you use the new design that Qdoba is developing, the size of the restaurant could be larger and the development costs could be higher.
  • The estimates below are based on the current 2013 trade dress; new trade dress is currently being designed and could increase development costs.

1.  Franchise Fee:  $30,000

  • The Franchise Fee is for one franchise entered into under a Franchise Agreement.
  • The standard Franchise Fee for individual restaurants is $30,000; the standard Franchise Fee for restaurants opened under the Development Agreement is $20,000 (after credit of the $10,000 Development Fee).
  • Qdoba reserves the right to charge a different fee for non-traditional sites.

2.  Development Costs, Plans, Legal Fees, Permits:  $26,000 to $39,000

  • Costs incurred for the development of an interior architectural and design plan will vary depending on the services provided and the professionals selected by you.
  • You may also incur legal fees for assisting in negotiating leases and advice on issues relating to the opening of your units.
  • These fees will also vary depending upon the services provided and the professionals selected by you.

3.  Leasehold Improvements:  $231,000 to $305,000

  • The cost of leasehold improvements will vary depending on the facility selected and the region or market you are in.
  • These leasehold improvement costs assume that the space will already include the requirements described in Qdoba’s standard landlord work letter. If the space is delivered AS-IS, the leasehold improvement costs will likely be higher.
  • This estimate is based on square foot construction costs of approximately $60 to $115 per square foot for interior improvements.
  • The estimate also assumes a landlord improvement allowance of $50,000. The allowance may be more or less, or may not be available, depending on the circumstances regarding your selected location. If no landlord improvement allowance is available, your leasehold improvement costs will be higher.
  • Qdoba estimates that the cost of leasehold improvements will be between $370,000 and $500,000 if you use the new design; however, these are very rough estimates.

4.  Furnishings, Fixtures, and Equipment:  $240,000 to $280,000

  • You must lease or purchase the following items, among others:  signs, kitchen equipment package and smallwares, display stands, interior decor package (tables; chairs; accessories; paneling; lighting; ceiling, window, and floor treatments; and artifacts), and decorations.
  • Qdoba estimates that the costs of furnishings, fixtures, and equipment will be between $460,000 and $480,000 if you use the new design; however, these are very rough estimates.

5.  Signage:  $18,000 to $30,000

6.  IT and Other Systems:  $20,000 to $32,000

  • Systems include the following items that you must lease or purchase:  phones, point of sale register and computer equipment, security system, safe, Q card system, music system, and cable.

7.  Opening Inventory:  $7,000 to $10,000

  • You will be required to purchase certain recipe items as specified by Qdoba, which constitute key components of the System.
  • Also included in this number are the opening food inventory, uniforms, linens, smallwares, first aid supplies, office supplies, initial cleaning supplies, gift certificates, menus and other printed items, and opening cash drawer.

8.  Travel and Living Expenses While Training:  $1,000 to $6,000

  • The travel and living expenses for trainees will depend upon factors such as travel distance, quality of accommodations, wages, and per diem allotment.
  • The estimate in this table includes expenses for 3 trainees.

9.  Miscellaneous Pre-Opening Expenses:  $10,000 to $16,000

10.  Grand Opening Advertising (at traditional sites):  $5,000

11.  Insurance:  $4,500 to $8,000 (excluding several types of coverage)

  • These figures are estimates for general liability coverage only. They exclude costs for property insurance, builder’s risk insurance, workers compensation insurance, business automobile insurance, earthquake and flood insurance, and other types of insurance, due to the great variation in such costs.

12.  Liquor License:  $600 to $4,000 (varies depending on location)

  • Based on Qdoba’s cost; however, liquor licensing costs vary widely.

13.  Real Property Lease/Purchase Costs:  Varies depending on location

  • The cost to purchase or lease real estate will vary depending on factors such as the location of the property, the condition of the local real estate market, the ability to negotiate favorable terms of sale or lease, current economic conditions, etc.

14.  Additional Funds (3 months):  $30,000 to $50,000

  • The amount of additional funds you will need will depend on the time necessary to achieve cash flow to cover operating expenses. This amount is the minimum recommended for a 3-month contingency.

15.  Total Estimated Cost (excluding real property costs):  $623,100 to $815,000

  • Qdoba ha compiled these estimates based on its experience in Company markets across the United States, excluding Manhattan, New York, because of its atypical population density.

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