This post was updated on October 25, 2016 to reflect information from The Brass Tap’s 2016 FDD (Item 7).
Detailed Estimates of The Brass Tap Franchise Costs Based on Item 7 (Estimated Initial Investment) of The Brass Tap’s 2016 Franchise Disclosure Document
- The amounts set forth in the table below assume a Brass Tap Bar ranging in size from 2,400 to 4,400 square feet.
1. Initial Franchise Fee: $35,000
2. Leasehold Improvements: $340,000 to $589,000
- These amounts are based on the cost of adapting the franchisor’s prototypical architectural and design plans to remodel and finish-out the Brass Tap Bar and the cost of leasehold improvements. These figures are the franchisor’s best estimate based on remodeling/finish-out rates.
- These costs may vary depending on whether certain of these costs will be incurred by the landlord or if your landlord grants any tenant improvement allowances.
3. Lease Payments – 3 Months: $9,000 to $25,000
- The figures are for the initial phase of the business for rent and assume that the premises of the Brass Tap Bar will be in a shopping center or urban location and be approximately 1,800 to 3,000 square feet in size.
- Lease costs are estimated at between $20 and $45 per square foot.
- These estimates do not include the cost of real estate since it is assumed that you will rent the space for your Brass Tap Bar.
- Annual rent is based on the commercial lease of approximately 3,000 square feet, including one month’s rent as an initial security deposit, plus 6.0% sales tax (your sales tax may differ).
4. Security Deposits: $8,500 to $15,000
- You will probably need to provide security deposits to your landlord and your local utilities, such as gas, electric, and water.
5. Equipment, Furnishings, and Fixtures: $146,500 to $238,500
- You must purchase equipment meeting the franchisor’s specifications to be used in the Brass Tap Bar, including walk-in cooler, tap system, bar back and sinks, and any equipment necessary for food preparation and storage.
- The furnishings and fixtures you must purchase also include tables, chairs, booths, bar, bar stools, and decor items.
- If your Brass Tap Bar will have patio space, you must also have additional tables, chairs, umbrellas, and heaters (if applicable for your climate).
- The franchisor has established relationships with equipment vendors for certain equipment used in the Brass Tap Bar that meets its specifications.
6. Audio and Video Equipment: $30,000 to $48,000
- You must also purchase audio and video equipment the franchisor requires for Brass Tap Bars.
7. Signage: $5,500 to $15,000
- These amounts represent your cost for the interior and exterior sign package. Your landlord or your local ordinances may have different restrictions it places on interior and exterior signage which may affect your costs.
8. Initial Inventory: $30,000 to $35,000
- These amounts represent your initial inventory of beer, wine, supplies, and paper goods for use in the initial phase of operating the Brass Tap Bar.
9. Blueprints and Plans: $7,700 to $25,000
- These are the estimate of your costs in obtaining any architectural and design services necessary for the construction of the Brass Tap Bar. You must adapt the prototypical plans and specifications to suit the premises.
- The franchisor may designate the supplier of architectural services.
10. Computer System: $19,000 to $30,000
- You must obtain the Computer System that the franchisor specifies. In some instances, you may be able to lease the Computer System instead of purchasing it.
11. Travel, Lodging, and Meals for Initial Training: $1,000 to $8,000
- The franchisor provides the Initial Training for up to three people at no additional charge. These estimates include only your out-of-pocket costs associated with attending the Initial Training, including travel, lodging, meals, and applicable wages.
- These amounts do not include any fees or expenses for training any other personnel.
- The low end of the estimate assumes that you are within driving distance of the training facility.
12. Licenses and Permits: $1,500 to $4,000
- These are estimates of the costs for obtaining local business licenses which typically remain in effect for one year.
- The franchisor prefers its franchisees to have an outdoor patio area, which may require an additional permit.
13. Insurance – 3 Months: $4,000 to $6,500
- These figures are estimates of the cost of the quarterly premiums for the insurance you must obtain and maintain for your Brass Tap Bar.
14. Grand Opening Advertising: $3,000 to $5,000
- You must conduct a grand opening advertising campaign which must include promotional giveaways such as beverage items and logoed merchandise. Your campaign must be conducted in the 60-day period comprising 30 days before and 30 days after opening of your Brass Tap Bar.
15. Professional Fees: $3,000 to $8,000
- The franchisor strongly recommends that you engage an accountant and an attorney to advise you in your evaluation of the franchise being offered.
16. Liquor License: $350 to $96,000
- The low end of this range represents an estimate of the annual fee for a beer and wine liquor license in Florida and the high end of this range represents a full liquor license in Florida (which is a lifetime asset rather than an annual renewable fee).
- Since the availability and expenses of acquiring a liquor license vary substantially from jurisdiction to jurisdiction, you should consult the appropriate governmental authority concerning the availability of the required license and the associated expenses for your Brass Tap Bar before you sign a Franchise Agreement.
- Depending on the location and jurisdiction, the cost of a liquor license may exceed the high range estimate disclosed in Item 7 and may reach or even exceed $500,000.
17. Additional Funds – 3 Months: $20,000 to $40,000
- You will need capital to support ongoing expenses, such as payroll, utilities, royalty fees, and local advertising, if these costs are not covered by sales revenue for your first three months of operation.
18. Total: $664,050 to $1,233,000 (excluding real property/tenant improvement allowance)
- The franchisor relied upon operating Brass Tap Bars to prepare these figures.
{ 0 comments… add one now }