This post was updated on April 4, 2017 to reflect information from HoneyBaked Ham’s 2017 FDD (Item 7).
Detailed Estimates of The HoneyBaked Ham Co. and Cafe Franchise Costs Based on Item 7 (Estimated Initial Investment) of HoneyBaked Ham’s 2017 Franchise Disclosure Document
1. Franchise Fee: $30,000
- You must pay a fee to renew the Franchise Agreement and be a franchisee in good standing at the time of renewal. There are other conditions to renewal.
2. Area Development Fee: $10,000 for each Store to be developed
3. Travel and Living Expenses While Training: $2,000 to $7,500
- The franchisor provides initial training at no charge, but you must arrange and pay for all transportation, lodging, meals, and wages for each person who attends the training. These costs will vary depending on the distance traveled and the type of accommodations.
4. Real Estate and Improvements: $93,000 to $165,000
- If you are developing a new Store, you must install flooring, counters, wiring, display shelving, and other items, and you must paint, as required by the specifications provided by the franchisor.
- The cost will vary depending on the condition of the premises, square footage, lease negotiations, and the extent to which your landlord funds leasehold improvements.
- These costs assume some amount of landlord contribution.
5. Architectural Fees: $5,500 to $17,000
- You must hire an architect to prepare plans for the Store and to obtain the initial permits required to build out the Store.
6. Equipment, Decor, and Fixtures: $62,500 to $110,000
- You must purchase or lease equipment like kitchen equipment, office furniture, a telephone system, security equipment, computer system, file cabinets, and decor which comply with the franchisor’s specifications.
7. Rent: $8,100 to $19,500
- Typically, Stores require 1,600 to 2,400 square feet of floor space and will be located in shopping centers, but may also be located in freestanding buildings.
- The estimate includes base rent for three months and does not include common area maintenance, insurance, or real estate tax charges.
8. Security Deposit: $2,700 to $6,500
- If you lease the premises, your landlord may require a security deposit before you take possession of the premises. This deposit is typically refundable at the conclusion of your lease provided you fulfill certain obligations under the lease.
9. Other Deposits and Licenses: $2,700 to $4,600
- This estimate includes amounts for business licenses, utility deposits, and other prepaid expenses that will be required to operate your Store.
10. Signs: $3,500 to $10,000
- This estimate includes installation of the sign, but excludes shipping.
11. Opening Advertising Costs: $10,000
- You must spend a minimum of $10,000 on your opening advertising. These costs are in addition to any regional, national, or local advertising or marketing contributions required by the Franchise Agreement.
12. Opening Inventory: $10,000 to $15,000
- You should have this amount available for you to purchase your Store’s initial inventory of specialty hams; turkey; other protein products such as pot roast, BBQ roast, and ribs; side dishes; desserts; condiments; bags; boxes and other paper and plastic supplies; lunch products including drinks, bread, and produce.
- Costs will vary depending on the time of year that you open your Store.
13. CMS/Point-of-Sale System: $9,200 to $13,100
- This estimate includes the cost of HB-Georgia’s proprietary CMS Point-of-Sale system. The costs of required third-party software licenses also are included in this estimate.
- The costs for travel and installation by the franchisor or others, if required, are not included in this estimate.
14. Additional Funds: $50,000
- You should have this amount available for you to cover employee salaries, utilities, and other operating expenses.
15. Total: $299,200 to $468,200
- The franchisor relied on its 18 years of experience in the retail and restaurant franchise business to compile these estimates.