Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Corner Bakery Cafe Franchise Costs (2016 FDD)

by Franchise Chatter on July 5, 2015

in Bakery Franchise, Fast Casual Restaurant Franchise, Franchise Costs

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Corner Bakery Cafe Photo by Kevin H.

This post was updated on August 29, 2016 to reflect information from Corner Bakery Cafe’s 2016 FDD (Item 7).

Detailed Estimates of Corner Bakery Cafe Franchise Costs Based on Item 7 (Estimated Initial Investment) of Corner Bakery Cafe’s 2016 Franchise Disclosure Document

1.  Pre-Construction Costs:  $56,000 to $144,000

  • This estimate includes costs for project and construction management, design, architectural, kitchen, mechanical, electrical, plumbing and related drawings, engineering, testing, permit expeditor, city permits and fees, and legal costs for lease negotiation.

2.  Construction Costs:  $372,000 to $750,000

  • This estimate includes all costs incurred in constructing or remodeling a site to conform to Corner Bakery Cafe standards, general contractor and sub-contractor fees, and other costs to construct leasehold improvements to conform to the standards, including exterior signage and awnings.
  • The cost of constructing a building shell is not included.
  • Construction costs presented are net of tenant improvement allowances, which vary widely. For Cafes that opened in 2011 through 2015, tenant improvement allowances ranged from $0 to approximately $523,000.

3.  Front of House Furniture, Fixtures, and Equipment:  $33,000 to $72,000

  • This estimate includes all front of house furniture and fixtures for a Cafe, including chairs, tables, window blinds, decor package, patio furniture, and umbrellas.

4.  Back of House Furniture, Fixtures, and Equipment:  $220,000 to $275,000

  • This estimate includes the cost of all kitchen equipment, soda system, ice makers, coffee equipment, specialty equipment, and sound system.

5.  Smallwares:  $26,000 to $34,000

  • The estimate includes cooking, serving, and other utensils for food preparation, trash cans, ladders, dollies, etc.

6.  Technology System:  $40,000 to $50,000

  • The figures provided is the cost to purchase a computerized cash accounting system and point of sale system, including installation.

7.  Catering Equipment:  $40,000

  • You must acquire equipment to support the catering program delivery service, including purchasing or leasing a refrigerated vehicle that meets Corner Bakery Cafe’s specifications for refrigeration installation and delivery capacity.

Total Estimated Building Costs:  $787,000 to $1,365,000

8.  Real Property:  Variable

  • Corner Bakery Cafe expects that you will lease the location for the Franchised Cafe, which will vary in size from 3,000 to 4,500 square feet, excluding a patio. Cafes are typically located in densely populated suburban and urban areas.
  • You may be required to pay the first and last months’ lease payment upon signing your lease agreement.

9.  Initial Franchise Fee:  $25,000

10.  Grand Opening Marketing:  $15,000

  • You must, during the period beginning 30 days before the scheduled opening of the Franchised Cafe and continuing for 180 days after the Franchised Cafe first opens for business, spend at least $15,000 to conduct grand opening marketing and promotion in authorized advertising media and for authorized expenditures.

11.  Training:  $40,000 to $100,000

  • This estimate includes the cost of sending your Controlling Principal, Operating Partner, Multi-Unit Manager, General Manager, and three mangers of the Franchised Cafe to attend Corner Bakery Cafe’s Initial Training Program in Dallas, Texas.
  • Corner Bakery Cafe does not charge a tuition fee for the Initial Training Program; however, you will be responsible for any salaries, meals, lodging, other living expenses, and transportation costs incurred by your employees while attending the Initial Training Program.
  • This estimate also includes the pre-opening training salaries for your managers and employees at the Franchised Cafe.

12.  Inventory:  $10,000 to $20,000

  • This estimate includes food products through opening day and initial start-up office supplies and restaurant supplies.

13.  Security Deposits:  $2,000 to $10,000

  • This item is an estimated range for security deposits, utility deposits, business licenses, and other prepaid expenses.

14.  Additional Funds – 3 Months:  $125,000 to $400,000

  • This is the franchisor’s estimate of your expenses for the initial period after you open for business, including professional fees, three months of lease payments, the cost of three months of inventory (including restaurant equipment and food), payroll, facility expenses like utilities, insurance, pest control, security, repairs and maintenance, complimentary sales, and other costs.

Total Estimated Opening Costs:  $217,000 to $570,000

Total Estimated Initial Investment:  $1,004,000 to $1,935,000

  • Corner Bakery Cafe relied on its own experience and information provided to it by its franchisees when preparing these figures.

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