Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Buffalo Wild Wings Franchise Costs (2017 FDD)

by Franchise Chatter on August 2, 2015

in Chicken Wings Franchise, Franchise Costs, Sports Bar Franchise

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Buffalo Wild Wings Photo by Mike Mozart

This post was updated on April 30, 2017 to reflect information from Buffalo Wild Wings’ 2017 FDD (Item 7).

Detailed Estimates of Buffalo Wild Wings Franchise Costs Based on Item 7 (Estimated Initial Investment) of Buffalo Wild Wings’ 2017 Franchise Disclosure Document

For New Free Standing and Non-Traditional Locations

  • The minimum square footage for a free standing location generally is 4,000 or more square feet; while non-traditional locations such as airports and military bases may have lesser square footage, they often result in higher build-out costs due to conditions unique to these venues (e.g. union labor, security clearances, etc.).
  • Accordingly, the ranges in the table pertain either to Restaurants ranging from 4,000 to 7,000 square feet with a seating capacity of approximately 185 to 285 people, or to Restaurants located in unique venues.

Hard Costs Relating to Construction

1.  Free Standing Building Improvements:  $1,500,000 to $1,800,000 (not including land, site work, and demolition)

  • For free standing locations, the range includes an estimate for the cost of building the Restaurant’s structure.

2.  Furniture, Fixtures, and Equipment:  $650,000 to $700,000

  • Includes refrigerators, freezers, ovens, point-of-sale system, tables, chairs and other equipment, furniture, and fixtures.
  • The initial investment required will depend on financing terms available and other factors.

3.  Signage and Graphics:  $45,000 to $120,000

4.  Sports Memorabilia:  $10,000 to $30,000

  • Prior to the date you open your Restaurant, you must purchase a minimum of $10,000 of sports memorabilia items from a reputable provider of such items.

5.  Computer POS System/Kitchen Display Unit:  $54,000 to $65,000

6.  Audio Visual Equipment:  $150,000 to $250,000

7.  Subtotal of Hard Costs Related to Construction:  $2,409,000 to $3,015,000

Other Expenditures

1.  Initial Franchise Fee:  $25,000 to $40,000

  • If you sign a Reservation Agreement, you pay $5,000 which the franchisor will credit toward the Initial Franchise Fee and you will pay the franchisor the remaining Initial Franchise Fee balance due when you sign the Franchise Agreement.

2.  Rent:  $7,500 to $30,000

3.  Lease and Utility Security Deposits:  $10,000 to $20,000

  • A typical utility security deposit is one month’s expense. A typical lease deposit will be an amount equal to one month’s rent.
  • These estimates may be significantly higher in some jurisdictions where the local authorities may require fees in excess of $200,000 for electrical or sewer/water connections.

4.  Fees Related to Site Approval and Construction of Your Restaurant:  $1,200 to $46,200

  • Prior to granting its acceptance of a site, the franchisor may require you to obtain and submit site and market information.
  • If this is your first BWW restaurant, the franchisor may require you to retain the services of a company specialized in assisting restaurant operators during the construction process. The costs associated with these services typically vary from $2,500 to $7,500 depending on the region and the amount of work and coordination needed to secure the appropriate permits and licenses.

5.  Architecture Fees (based upon utilization of national firm):  $60,000 to $150,000

6.  Initial Inventory:  $12,000 to $18,000

  • Initial inventory consists of various food products, beverages, paper products, cleaning supplies, and other supplies used in the operation of the Restaurant, as well as other merchandise or products sold by the Restaurant.

7.  Insurance:  $8,000 to $35,000

  • The estimate is for approximately 25% of an annual premium and includes liquor liability coverage. The balance of the annual premium is generally payable in installments over the remaining period.
  • The estimate also includes a non-refundable annual payment for an additional $25 million umbrella liability coverage.

8.  Training:  $7,000 to $9,000

  • You must make arrangements and pay the expenses for you, your Control Person, the Unit General Manager, and at least two assistant managers to attend the training program, including transportation, lodging, meals, and wages.
  • The estimate provided contemplates initial training of 4 people for 7 weeks.

9.  Reimbursement of Expenses for Opening Team:  $0 to $12,000

  • You will reimburse the franchisor for the travel expenses and prorated salaries for the Opening Team members who assist you with the opening of your Restaurant.
  • The low range assumes that you are capable of and in fact do train your own employees prior to opening your second and subsequent Restaurants, while the high range assumes that you require the services of the franchisor’s Opening Team for your first or subsequent Restaurants.

10.  Grand Opening Advertising/Marketing:  $12,500

  • These amounts must be spent sometime within 45 days prior and 45 days following the opening of your Restaurant, unless otherwise approved by the franchisor.

11.  Office Equipment and Supplies:  $4,000 to $7,000

  • Items include telephones and a facsimile machine.

12.  Liquor License:  $5,000 to $200,000

  • The cost of a liquor license can be significantly higher in a few states and municipalities where the number of licenses is severely restricted or available only from an existing holder. For example, the franchisor’s experience suggests that you may incur up to $1,000,000 or more to obtain a liquor license in some areas on the east coast.

13.  Professional Fees:  $20,000 to $70,000

14.  Additional Funds (3-month period):  $100,000 to $150,000

  • This amount of working capital is projected as sufficient to cover initial operating expenses, including management salaries, for a period of 3 months. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.
  • Expenses not included are hourly labor costs, food and product costs, and rent.
  • At the time of opening, you must have a minimum of $100,000 in immediately accessible working capital funds to be used solely to defray the costs of operating the restaurant for the initial months.

15.  Subtotal of Other:  $247,225 to $799,200

Total:  $2,656,225 to $3,814,200 (not including land, site work, and demolition)

  • The franchisor has used its parent’s 35 years of experience in the business to compile these estimates.

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