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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Golden Corral Franchise Costs (2015 FDD)

by Franchise Chatter on December 6, 2015

in Buffet Restaurant Franchises, Franchise Costs

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Golden Corral Photo by sarit_mishra

Detailed Estimates of Golden Corral Franchise Costs Based on Item 7 (Estimated Initial Investment) of Golden Corral’s 2015 Franchise Disclosure Document

For GC-11M Restaurant Design

1.  Initial Franchise Fee:  $50,000

2.  Purchase of Land:  $450,000 to $1,700,000

  • The figures in the table are based on the estimated cost of your purchase of unimproved land and estimated required site preparation costs, excluding depreciable leasehold improvements. Special site restaurant costs may be higher.
  • Golden Corral estimates that the square footage cost of unimproved land for a free-standing building will range between approximately $6.50 and $22.00 for GC-11M Restaurants.
  • If you lease the Restaurant premises, these costs will be reflected in the rent.

3.  Construction, Contractor Site Preparation, Leasehold Improvements:  $1,300,000 to $2,500,000

  • The figures in the table are based on the estimated costs for site preparation and constructing the premises on unimproved land that has been purchased; however, in certain situations, the costs may exceed those reflected in the chart.
  • Typically, site preparation includes demolition, if needed, clearing, grading, soil tests, paving, walks and pads, utilities, storm drainage, lighting, retaining walls, fences, landscaping, and irrigation.
  • Building construction typically includes structure and roofs, exterior finishes, partitions and ceilings, doors and hardware, heating and cooling systems, plumbing and fixtures, electrical and lighting, painting and wall covering, floor covering (excluding carpet), fire prevention and alarm systems.
  • You will incur architectural and engineering fees in constructing or converting the premises, or making leasehold improvements.
  • If you lease the Restaurant premises, Golden Corral estimates the annual rental of the required space will be 9% to 12% of what would have been the total cost of acquisition and construction of the property.
  • Some jurisdictions assess high impact or similar type fees, and require significant off-site work as part of the zoning, permitting, or other approval process. These higher than usual fees/costs could be as high as $600,000 or more, and will make, in certain instances, the construction/site preparation costs exceed the estimates appearing in the table.

4.  Signage:  $51,200 to $88,000

  • You must have one free-standing sign. This estimate includes both exterior and interior signage, as well as the cost of installation, freight, foundation, and internal wiring.

5.  Furniture and Equipment:  $672,372 to $717,545

  • You will need tables, chairs, and booths for seating approximately 380 to 400 customers for a GC-11M Restaurant. You also must purchase the manager’s office furniture, computer equipment, kitchen equipment, small wares/utensils, grills, exhaust equipment with a fire suppression system, refrigeration, fire prevention equipment, and equipment for food bars.

6.  Opening Advertising:  $10,000 to $15,000

7.  Initial Training:  $61,200 to $172,300

8.  GM Workshop (currently under development):  $785

9.  On-Site Assistance Costs:  $24,600 to $83,200

  • Golden Corral estimates that you will employ between 12 and 22 individuals for on-site assistance. The estimate in the table includes the costs of employing these individuals and the transportation, food, lodging, and other expenses associated with their status as your employees.
  • If this is your first Restaurant, your General Manager and Associate Manager-Kitchen may be required to also attend Practice Management training, in which event your initial training costs could increase by as much as $34,000.

10.  Inventory:  $50,000 to $80,000

  • Inventory includes food items such as fresh meats, produce, sauces and condiments, and other supplies, such as paper goods and cleaning supplies.

11.  Insurance:  $12,000 to $22,500

  • The estimates are your costs for the minimum insurance required by the Franchise Agreement for a three-month period. The estimates for insurance will vary depending on rates and practices applicable to a particular locality.

12.  Additional Funds (first 3 months of operation):  $19,000 to $110,000

  • Franchisees will need additional funds to support on-going expenses, such as payroll, supplies, rent, utilities, and business licenses, to the extent that these costs are not covered by Gross Sales.
  • The amount shown is the minimum recommended at the opening of the Restaurant in order to cover on-going expenses in excess of Gross Sales for the first 3 months of Restaurant operations.
  • The franchisor has relied on the previous experience of its existing franchisees and area developers in estimating your additional fund needs.

13.  Total:  $2,701,157 to $5,539,330

For GC-11S Restaurant Design

  • The total estimated initial investment necessary to begin operation of a GC-11S Golden Corral restaurant ranges from $1,968,800 to $3,904,446.

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