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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Qdoba Mexican Eats Franchise Costs (2017 FDD)

by Franchise Chatter on April 26, 2015

in Franchise Costs, Mexican Restaurant Franchise

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This post was updated on May 25, 2017 to reflect information from Qdoba Mexican Eats’ 2017 FDD (Item 7).

Detailed Estimates of Qdoba Mexican Eats Franchise Costs Based on Item 7 (Estimated Initial Investment) of Qdoba Mexican Eats’ 2017 Franchise Disclosure Document

  • Calculations regarding estimates for leasehold improvements, building construction, and site work are based upon restaurants of 2,400 to 3,000 square feet, using Qdoba’s current design elements.

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:  $135,000 to $250,000

  • 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:  $294,000 to $922,000

  • 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.
  • A landlord improvement allowance may also be obtained that reduces the cost of leasehold improvements. A common allowance may range from $62,000 to $125,000, but the allowance may be more or less, or may not be available, depending on the circumstances regarding your selected location.

4.  Furnishings, Fixtures, and Equipment:  $220,000 to $401,000

  • You must lease or purchase the following items, among others:  signs, kitchen equipment package, display stands, interior decor package (tables; chairs; accessories; paneling; lighting; ceiling, window, and floor treatments; and artifacts), and decorations.

5.  Signage:  $16,000 to $115,000

6.  IT and Other Systems:  $11,000 to $37,000

  • Systems include the following items that you must lease or purchase:  phones, point of sale software and registers, printers, network infrastructure equipment, web-based mobile training device(s), computer equipment, security system, safe, Q card system, and music system.

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, smallwares, first aid supplies, office supplies, initial cleaning supplies, gift cards, menu boards and other printed items, and opening cash drawer.

8.  Travel and Living Expenses While Training:  varies

  • The travel and living expenses for trainees will depend upon factors such as travel distance, quality of accommodations, transportation costs, wages, and per diem allotment.

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:  varies depending on location

  • Liquor licensing costs vary widely. Please research costs in your jurisdiction.

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.
  • Most franchisees lease rather than purchase, and most franchised locations are in-line or end cap real estate space (as opposed to freestanding locations).

14.  Business Licenses, Health Permits, and Similar Permits:  $100 to $3,000 (varies depending on location)

15.  Additional Funds (3 months):  $98,000 to $272,000

  • 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.

16.  Total Estimated Cost (excluding real property and liquor license costs):  $871,000 to $2,034,000

  • Qdoba ha compiled these estimates based on its actual and expected costs in Company markets across the United States.

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