This post was updated on August 29, 2016 to reflect information from BGR The Burger Joint’s 2016 FDD (Item 7).
Detailed Estimates of BGR The Burger Joint Franchise Costs Based on Item 7 (Estimated Initial Investment) of BGR The Burger Joint’s 2016 Franchise Disclosure Document
1. Initial Franchise Fee: $40,000
- The Franchise Fee is $40,000 for the first Restaurant you open and is due upon the signing of the Franchise Agreement.
2. Leases and Security Deposits: $12,000 to $20,000
- You must secure a retail premises on which to locate the Restaurant. You will require a space of approximately 1,200 to 2,000 square feet.
- This estimate covers your cost for the security deposit and the first month’s rent. The remainder of the rent expense during the first three months is covered under Additional Funds.
- The amounts paid are typically not refundable except for a security deposit, which may be refunded.
3. Permits, Fees, Legal: $10,000 to $30,000
4. Leasehold Improvements: $65,000 to $323,000
- Leasehold improvements include permits and permanent construction items in the franchisee’s facility. Such items typically include drywall, flooring, cabinets, countertops, HVAC, plumbing, and electric.
- Construction costs in some areas of the country may exceed these estimates.
- Your landlord may provide some or all of these improvements at no additional cost. BGR’s affiliates have received leasehold improvement financial contribution assistance from the landlord in amounts ranging from $0 to $105,000 per location.
- You may also be provided free rent for a period of time by your landlord. BGR’s affiliates have received free rent concessions from their respective landlords for periods ranging from 0 to 4 months per location.
- The high end range is based on BGR’s experience in remodeling an existing, abandoned free-standing gas station.
5. Signage: $5,000 to $10,000
- This estimate includes the cost of acquiring menu boards, posters, and outdoor signage for the Restaurant.
6. Initial Inventory: $5,000 to $12,000
- You are required to purchase a beginning and on-going inventory of food and beverages, including meat and produce, smallwares, paper goods, and cleaning supplies. Certain of these items must be purchased from approved and designated suppliers.
7. Insurance: $1,000 to $2,000
- Business insurance coverage will vary from state to state and will depend on your prior loss experience, if any, and/or the prior loss experience of your insurance carrier in the state or locale in which you operate your Restaurant, and national or local market conditions.
8. Training Expenses: $3,000 to $10,000
- BGR will provide tuition-free training for you and one of your key employees and any other employees who attend initial training at the same time as you.
- You will be responsible for your and your designated attendees’ costs of attending initial training, including travel, meal, and lodging expenses.
9. Opening Advertising: $7,500
- You must spend a minimum of $7,500 to develop and implement an opening advertising campaign beginning two weeks prior to opening and ending two weeks after your opening within your Marketing Area (“Opening Advertising Requirement”).
- The Opening Advertising Requirement is in addition to the Advertising Fee and Local Advertising Requirement, and any rebates or commissions earned from suppliers.
10. Equipment, Supplies, and Fixtures: $30,000 to $100,000
- You must purchase or lease start-up equipment meeting BGR’s standards and specifications. Part or all of these upfront costs can be eliminated if you are able to lease furniture and equipment, subject to third-party lease terms and approval.
11. Business Licenses and Professional Fees: $500 to $10,000
- BGR requires its franchisees to offer wine and beer and, at its discretion, liquor at their Restaurants, if they obtain and maintain the appropriate license and comply with all federal, state, and local laws relating to liquor distribution and dispensation.
- The cost of business liquor licenses and related permits will vary greatly from state to state.
- If federal, state, and/or local laws prevent you from obtaining the necessary licenses, or if the direct cost of obtaining the necessary licenses to offer and sell wine and bottled beer or alcoholic beverages, as applicable, exceeds $15,000 (excluding legal fees and insurance expenses associated with obtaining the license), you will be permitted to open and operate a Restaurant without a license.
12. Computer Equipment and Software: $11,300 to $15,300
- You must purchase a computer and POS system meeting BGR’s standards and specifications, including hardware, software, two monitors, and two printers. Additional costs are incurred if you purchase an additional PC, KV Switch, and an all-in-one printer.
13. Additional Funds (3-6 Months): $12,500 to $20,000
- The range in the chart reflects the amount of additional working capital you will need during the first three months of operation to pay other expenses including, among other things, payroll and payroll taxes.
- These figures are estimates and BGR cannot guarantee that you will not have additional expenses in starting the business.
14. Total: $202,800 to $599,800
- These estimates are based on the experience of BGR’s affiliates in opening and operating eight substantially similar restaurants in the Washington, D.C. area, the first of which opened in May of 2008.