Franchise Costs: Detailed Estimates of Hurricane Grill & Wings Franchise Costs (2015 FDD)

Detailed Estimates of Hurricane Grill & Wings Franchise Costs Based on Item 7 (Estimated Initial Investment) of Hurricane Grill & Wings’ 2015 Franchise Disclosure Document

1.  Franchise Fee:  $35,000

2.  Real Estate/Rent:  $5,000 to $20,000

• Typically, a Restaurant will range in size from 2,000 to 5,500 square feet. The estimated cost range includes the costs to rent the facility for one month and your costs to enter into a lease agreement including the first month’s rent and a security deposit equal to one month’s rent.

• Estimated rental costs for an additional 2 months are included with the category “Additional Funds.”

• The franchisor cannot estimate the cost to purchase a suitable facility.

3.  Utility Deposits:  $3,000 to $10,000

• If you are a new customer of your local utilities, you will generally have to pay deposits in connection with services such as electric, telephone, gas, and water.

4.  Leasehold Improvements:  $195,000 to $343,000

• You will need to convert an existing facility into a Restaurant, or you will construct improvements of, or “build out,” the premises at which you will operate the Restaurant. These improvements may include, for example, wiring, flooring, sheetrock, plumbing, paint, HVAC, lighting, millwork, and decor items.

• You may be able to obtain a leasehold allowance from the landlord covering a portion of the costs of constructing the leasehold improvements.

• The figures in the chart are based on the actual experiences of Hurricane Grill & Wings franchisees (as reported to the franchisor) and do not reflect allowances from the landlord.

5.  Insurance:  $5,000 to $10,000

• You must purchase the type and amount of insurance specified in the Franchise Agreement in addition to any other insurance that may be required by applicable law, any lender, or lessor.

6.  Office Equipment and Supplies:  $500 to $3,000

• You must purchase general office supplies including stationery, business cards, and typical office equipment.

7.  Training:  $40,000 to $60,000

• The cost of initial training for four people is included in the Franchise Fee, but you are responsible for transportation and expenses for meals and lodging while attending training.

• This amount also includes on-site training for your hourly employees by the franchisor’s training team. The franchisor pays the cost of the lead trainer.

• The cost for any other training personnel is your responsibility. The cost of each additional trainer is up to $150 per day plus travel and housing expenses and meals. The number of additional trainers sent depends on the size of your Restaurant.

8.  Signage:  $12,000 to $20,000

• This range includes the cost of all signage used in the Restaurant. The signage requirements and costs may vary based upon the size and location of the Restaurant, local zoning requirements, landlord requirements, and local wage rates for installation, among other things.

9.  Furniture, Fixtures, and Equipment:  $100,000 to $275,000

• You must purchase or lease and install fixtures, tables and chairs, equipment (including the cash register), POS system, camera system, audio and visual equipment, and decor necessary to operate your Restaurant.

• The figures in the table are for purchasing the furniture, fixtures, and equipment.

10.  Initial Inventory:  $7,000 to $10,000

• You will be required to purchase an initial supply of approved food and beverage products. The cost will vary based upon the size and location of the Restaurant, time of season, competition among suppliers, and other related factors.

11.  Grand Opening:  $15,000

• You must spend at least $15,000 on Grand Opening Advertising during the first 3 months you operate the Business. You may choose to spend more.

12.  Licenses, Liquor, and Permits:  $5,000 to $15,000

• State and local government agencies typically charge fees for operating licenses, health permits, and licenses for serving food and beverages. The fees vary by jurisdiction.

13.  Legal & Accounting:  $5,000 to $8,000

• You should employ an attorney, an accountant, and other consultants to assist you in establishing your Restaurant and reviewing the agreements.

14.  Building Permits/Impact Fees:  $2,000 to $20,000

• You will likely have to obtain construction or building permits for the remodeling of the Restaurant’s facility and you may have to pay impact fees depending on the policies of local government agencies.

15.  Dues & Subscriptions:  $500 to $1,000

• You must purchase subscriptions to an approved satellite radio and TV system.

16.  Additional Funds (Initial Period – 3 Months)/Working Capital:  $20,000 to $50,000

• To the extent that operational revenues do not cover these expenses, you will need additional funds to support the operational costs of your business, including such expenses as rent, leases, payroll, utilities, insurance, taxes, loan payments, advertising, supplies, inventory, and other expenses.

17.  Total:  $450,000 to $895,000

• In compiling this chart, the franchisor relied on its and its executives’ combined industry experience in operating Hurricane Grill & Wings Restaurants, as well as information it has received from its franchisees.

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