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Franchise Costs: Detailed Estimates of Hungry Howie’s Franchise Costs (2017 FDD)

by Franchise Chatter on September 27, 2015

in Franchise Costs, Pizza Franchises

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Hungry Howie's Pizza Photo by toastforbrekkie

This post was updated on July 16, 2017 to reflect information from Hungry Howie’s 2017 FDD (Item 7).

Detailed Estimates of Hungry Howie’s Franchise Costs Based on Item 7 (Estimated Initial Investment) of Hungry Howie’s 2017 Franchise Disclosure Document

  • The estimated initial investment also includes Non-Traditional Restaurants. Any known variations between Restaurants and Non-Traditional Restaurants are stated in the notes below.

1.  Franchise Fee:  $12,500 to $25,000

2.  Franchise Grand Opening Fee:  $15,000

3.  Real Estate:  $1,600 to $3,350 per month

  • You must secure suitable real estate for your Restaurant. Typical locations for Restaurants are between 1,200 and 1,600 square feet. Ordinarily, the real estate is leased and located in strip centers within metropolitan and suburban areas. Less typically, the real estate is a free-standing building.
  • The amounts indicated assume that the real estate is leased and reflect a typical range of monthly rentals. The amount of your rent is dependent upon such factors as size, condition, and location.
  • Neither Hungry Howie’s nor its affiliates will lease real estate to you.
  • Ordinarily, you will not pay rent until you open your Restaurant. However, there are instances in which you may have to pay rent for 1-2 months prior to opening your Restaurant, due to your unique lease negotiations and construction schedule.
  • The space and monthly rent for a Non-Traditional Restaurant will be dependent upon the venue in which the Non-Traditional Restaurant is located and varies significantly.

4.  Security Deposits:  $1,100 to $4,650

  • Security deposits are payable to landlords and utility companies. This estimate contemplates a security deposit equal to one month’s rent. You may be required to pay a larger security deposit.

5.  Leasehold Improvements:  $79,400 to $183,000

  • The amount of leasehold improvements is before any landlord-provided tenant improvements or allowances.

6.  Architectural Drawings:  $6,100 to $9,300

  • The amount shown does not include the $2,500 fee that you must pay to the franchisor’s designated architect if you utilize an Alternate Architect. The use of an Alternate Architect is not typical.
  • The amount shown also does not include additional services such as additional on-site visits, engineering fees, and reimbursable expenses.
  • Your cost will vary depending on the type of build-out of the Restaurant, such as in-line strip centers, conversion of free-standing buildings, or stand-alone shells.

7.  Equipment and Fixtures:  $99,100 to $156,750

  • The amount shown is for the purchase of equipment and fixtures for a Restaurant. Equipment and fixtures for a Non-Traditional Restaurant will vary depending on space and menu limitations, but are generally less than a Restaurant.
  • If you lease these items, your initial investment will be less than the amount shown but there will be a monthly lease payment.
  • Prior to opening the Restaurant, you must purchase from the franchisor a conveyor oven and hood system. The franchisor is the only designated supplier for the sale of the conveyor oven and hood system which you are required to install in the restaurant.
  • The cost of the conveyor oven and hood system will be between $42,700 and $58,900, depending on the number and size of the ovens and hood system required, installation charges, and shipping/freight charges.
  • You will be required to pay a deposit of 50% of the total costs at the time you place an order with the franchisor. The balance must be paid prior to delivery and installation.

8.  Point-of-Sale System:  $21,500 to $28,600

9.  Opening Inventory:  $8,600 to $18,900

10.  Insurance:  $1,200 to $7,900

  • The amount shown includes an initial deposit and the first required insurance payment.
  • You must maintain the following insurance coverage:  workers’ compensation and occupational disease; general liability, including products liability with a limit of not less than $1,000,000 per occurrence; non-owned and hired auto liability with the highest attainable limit available in the state in which your Restaurant is located; business interruption insurance; business property insurance; employment practices liability insurance; and umbrella or excess liability insurance.
  • The franchisor may require you to purchase other types of insurance and it may require you to increase coverage limits.

11.  Security Deposits – Utilities:  $375 to $3,850

12.  Signs:  $3,700 to $13,200

13.  Travel and Living Expenses During Training:  $1,200 to $6,350

14.  Additional Funds – 3 Months:  $0 to $20,000

  • This line-item estimates the funds needed to cover your initial expenses during the first 3 months of operation (other than the items identified separately in the table). These expenses do not include any draw or salary for you or an Owner Operator. However, this is only an estimate.

15.  Total:  $251,375 to $495,850

  • The franchisor has relied on its numerous years of experience in franchising, and its principals’ and affiliates’ numerous years of experience developing and operating Hungry Howie’s Restaurants to complete these estimates. The franchisor does not offer direct financing to franchisees for any items.

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