Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Popcornopolis Franchise Costs (2015 FDD)

by Franchise Chatter on May 9, 2015

in Franchise Costs, Popcorn Franchise

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Popcornopolis Photo by Harvey-Harv

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

1.  Initial Franchise Fee:  $30,000

  • The franchise fee is not refundable.

2.  Development Fee:  Varies

  • The development fee is equal to $15,000 for each Store to be developed. The portion of the development fee allocable to each Store will be credited against the initial franchise fee due for that Store.

3.  Rent:  $4,000 to $9,000

  • Popcornopolis estimates that the size of the Store will range from 600 to 1,000 square feet (or as small as 150 square feet for a kiosk).
  • Popcornopolis expects that all franchisees will lease rather than purchase real estate and construct the Store.
  • The lease amount will vary widely depending on local market conditions, your location within the market, and the extent, if any, to which the landlord contributes to the cost of leasehold improvements.
  • This estimate does not include any security deposit that may be required by the landlord.

4.  Security Deposits:  $1,000 to $9,000

  • Security deposits may be required by utilities, the landlord, and equipment lessors. Amounts will vary depending on the provisions of various leases, utilities’ policies, and your credit rating.

5.  Other Real Estate Expenses:  $1,500 to $7,500

  • This estimate involves expenses related to locating your store location and legal review of your real estate documents.

6.  Construction of Leasehold Improvements, including Fixtures, Furnishings, Equipment, and Signage:  $128,500 to $285,000

  • The estimate is for the construction of leasehold improvements and the purchase and installation of all required fixtures, furnishings, equipment, and signage for a Store containing both display and cooking areas.

7.  Kitchen Smallwares, Crockery, Cutlery, etc:  $1,000 to $2,500

  • This estimate is for a Store containing both display and cooking areas.

8.  All Other Permits and Licenses:  $2,000 to $5,000

  • Permit and license fees include building permits, utility hook-up fees (also known as tap fees and/or impact fees), and various health permits.
  • Utility hook-up fees vary widely by community. Certain jurisdictions impose very high fees.

9.  Insurance:  $2,000 to $4,000

  • The estimate covers 3 months of insurance premiums for the minimum required coverage.

10.  Pre-Opening Training Costs:  $1,000 to $5,000

  • Popcornopolis will cover the costs of certain training (i.e. instruction and required materials); however, you will be responsible for all other expenses, such as transportation, lodging, meals, wages, and workers’ compensation insurance.
  • This estimate is per attendee at Popcornopolis’s formal training program held at its principal office or at another location it designates.

11.  Initial Food and Beverage Inventory:  $9,500 to $12,000

  • This estimate covers the cost of the original opening inventory and a sufficient amount of food, food supplies, and beverages for 1 week following the opening of the Store.

12.  Supplies:  $2,500 to $4,000

  • This estimate covers expenses for Store and other office and cleaning supplies, menus, uniforms, promotional items, stationery, etc.

13.  Computer Systems:  $2,500 to $5,000

14.  Additional Funds – First 3 Months:  $15,000 to $20,000

  • You will need capital to support on-going expenses, such as payroll; replenishing the inventory of food, beverages, and supplies; rent; interest/principal repayments; and utilities, to the extent that Gross Sales does not cover these costs.
  • This is only an estimate and Popcornopolis cannot guarantee that you will not need additional funds during or after the start-up phase of the Store.
  • When making this estimate, Popcornopolis relied upon the experience of its previously opened company Stores.

15.  Total:  $200,500 to $398,000

  •  Popcornopolis does not provide any financing for any portion of your initial investment.

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