Detailed Estimates of Project Pie Franchise Costs Based on Item 7 (Estimated Initial Investment) of Project Pie’s 2015 Franchise Disclosure Document
For Traditional Venue (1,600 to 2,400 Square Feet)
- The term “Traditional Venue” refers to the location of a Project Pie restaurant in an in-line or end cap retail space, stand-alone space, or other type of retail location where restaurants are commonly found.
1. Initial Franchise Fee: $35,000
2. Lease Review: $7,500 to $13,500
- This category estimates your likely real estate professional fees including any attorney fees to review and negotiate a lease for the Project Pie restaurant including the use of the franchisor’s Addendum to Lease.
- As a condition of the franchise license, all franchisees must hire Newmark Grubb Knight Ellis, an independent leasing advisory firm, to prepare a market study in the general market area that the franchisor and franchisee mutually identify for your Project Pie restaurant.
- The low and high ranges include a $6,000 allowance for Newmark’s fee, but they do not include an allowance for any broker or finder’s fees that you may have to pay to the landlord or real estate developer.
3. Architect: $8,500 to $15,000
- This category estimates your likely fees for architectural services to develop construction drawings for the Project Pie restaurant based on the actual dimensions of the Approved Location.
- You must hire Neptune Design Group, LLC, an independent restaurant interior design firm to prepare architectural and interior design plans for build-out of the Approved Location, and this category includes an estimate of fees payable to Neptune.
4. Building Permits: $3,000 to $10,000
- This includes the cost of building permits which you must obtain before you begin construction work.
5. Professional Services: $9,000 to $15,000
- You may require an accountant and an attorney to provide services to help you form a new business entity to own the franchise and review contracts, including the Disclosure Document.
6. Travel and Initial Training: $3,000 to $7,500
- The low/high range reflects expenses to enroll one person (who must be a Primary Owner) to the franchisor’s New Franchisee Orientation (NFO) segment; two persons to the franchisor’s multi-module Leader-in-Training (LIT) Restaurant Management training segment (both would be individuals whom you want to qualify as a Certified Leader); and an unlimited number of persons in the New Restaurant Opening segment.
- While the franchisor does not charge a fee for the pre-Opening Date initial training programs, you will have expenses to send your employees to training before the Opening Date.
7. Leasehold Improvements: $140,000 to $320,000
- Construction and leasehold costs include expenses to conform the approved space to the franchisor’s comprehensive specifications.
- The low estimate assumes that the space you lease was previously used as a restaurant while the high estimate assumes that you take possession of an empty shell.
8. Equipment: $80,000 to $125,000
- The franchisor specifies the kitchen equipment that you must install in your Project Pie restaurant.
9. Tableware and Smallwares and Supplies: $10,000 to $15,000
- Tableware, smallwares, and supplies include knives, chopping boards, food processors, spoons, ladles, stainless steel pans and pizza trays, and an opening quantity of cleaning supplies, plastic ware, serving containers, napkins, and take-away boxes and containers.
- The franchisor includes expenses to replenish supplies during the remainder of the initial period under Additional Funds.
10. Signage, Menu Boards, and Graphics: $7,000 to $19,500
- This category includes exterior and interior signs, menu boards, and graphics, which will range in cost depending on location type.
11. Computer Equipment and POS System: $5,500 to $10,000
12. Opening Inventory: $6,000 to $11,000
- The low and high opening inventory estimates cover your expenses for an initial supply of ingredients, foods, and beverages sufficient to cover the immediate Opening Day period until depletion.
- The franchisor includes expenses to replenish inventory during the remainder of the initial period under Additional Funds.
13. Grand Opening Expenses: $3,500 to $7,000
- You must spend a minimum of $3,500 (in wholesale food costs) on free product given away to restaurant guests as part of the approved Grand Opening Marketing activities that you conduct to publicize the opening of your Project Pie restaurant during the 90-day period beginning with 30 days before and continuing through the first 60 days after the Opening Date.
14. Insurance: $1,500 to $3,500
- Insurance costs vary according to your insurability and the location of the Franchised Restaurant. The estimate includes the initial phase of the business (first 3 months after the Opening Date).
15. Real Estate Lease Security: $6,500 to $20,000
- This category reflects just the security deposit payable to the landlord before the Opening Date.
- The franchisor includes an allowance for rent during the initial period under Additional Funds and assumes that no rent is due or payable before the Opening Date.
- The low estimate reflects a security deposit equal to one month’s rent, and the high estimate reflects a security deposit equal to two months’ rent, which, in the franchisor’s experience, is typical for a retail space.
16. Beer and Wine License: $1,500 to $7,500
- This category reflects the cost to secure a state or local license to serve beer and wine which can vary considerably by location. Your actual costs may also depend on the local resale market.
17. Additional Funds for 3 Months: $27,000 to $61,000
- This category includes miscellaneous expenses that you are likely to incur during the first 3 months after the Opening Date that the franchisor does not cover elsewhere, like costs for rent, employee uniforms, additional inventory and supplies during the initial period, janitorial services, telephones and internet connections, and salaries. This category also covers utility deposits, business licenses, and other pre-paid expenses.
- While the lease security deposit is accounted for in a separate line item, Additional Funds includes a low/high estimate of 3 months’ rent.
18. Total for Traditional Venue (excludes land acquisition costs): $354,500 to $695,500
For Non-Traditional Venue (700 to 1,100 Square Feet)
- The term “Non-Traditional Venue” refers to the location of a Project Pie restaurant in a larger public or privately-owned destination or complex where the owners include restaurant services as an accommodation to a captive market.
- The total estimated initial investment necessary to begin operation of a Project Pie restaurant in a non-traditional venue (non-airport) ranges from $298,500 to $630,000.
- The total estimated initial investment necessary to begin operation of a Project Pie restaurant in an airport ranges from $348,500 to $805,000.