Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
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Franchise Costs: Detailed Estimates of Culver’s Franchise Costs (2016 FDD)

by Franchise Chatter on January 26, 2016

in Franchise Costs, Frozen Dessert Franchise

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Culver's Concrete

This post was updated on February 6, 2016 to reflect information from Culver’s 2016 FDD (Item 7).

Detailed Estimates of Culver’s Franchise Costs Based on Item 7 (Estimated Initial Investment) of Culver’s 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $20,000 to $55,000

  • The initial franchise fee generally is $55,000. The initial franchise fee for certain existing franchisees who open an additional Restaurant is $45,000. The initial franchise fee for certain existing franchisees that offer at least a 19% interest in their franchise entity to an existing Key Manager is $30,000.
  • The initial fee may be reduced by $10,000 if you qualify for Culver’s Veteran’s discount.

2.  Land:  $225,000 to $1,600,000

  • The minimum amount stated will be less if you lease the land upon which your Restaurant sits.
  • The cost of purchasing unimproved land will vary significantly depending on location, availability of utilities, and other factors. Depending on the market conditions and other factors in your geographic area, your land costs may vary from the estimates.
  • Culver’s estimates that the size of your land will range from 40,000 to 50,000 square feet.

3.  Building:  $980,000 to $1,550,000

  • Culver’s assumes that you will acquire land and build the building for the Restaurant, which estimate is for the cost of developing the site and constructing a new building. The minimum amount stated will be less if you lease the building for your Restaurant.
  • The Restaurant premises are typically freestanding. This estimate includes the expense of a new, completely finished building, including carpentry, all interior finishes, mechanical, electrical, and plumbing.
  • This estimate also includes fees for architectural and engineering services such as site planning, state approvals, and other permits for building, heating and airconditioning, plumbing, bid review, construction coordination, pay request review, and project closeout.
  • You may also buy an existing building to convert into a Culver’s Restaurant at a lower cost than new construction.

4.  Travel, Living, and Other Expenses During Training:  $20,000 to $80,000

  • You are responsible for making arrangements and paying the expenses for any persons attending the training program and for on-site training at your Restaurant before opening, including transportation and lodging.
  • The low estimate reflects training cost for an existing franchisee who is purchasing his/her second Restaurant and contemplates the training of 3 managers for 7 weeks each, 3 key employees for 20 hours each, and 45 crew members for 12 hours each.
  • The high estimate contemplates the training of 2 shareholders of the franchise for 16 weeks each, 6 managers for 7 weeks each, 4 key employees for 40 hours each, and 60 crew members for 17 hours each.

5.  Initial Inventory:  $35,000 to $45,000

  • Initial inventory consists of various food products, beverages, paper products, cleaning supplies, and other supplies utilized in operating the Restaurant, as well as other merchandise or products sold in the Restaurant.
  • The initial inventory expenditure will vary according to anticipated sales volume.

6.  Furniture, Fixtures, Equipment, and Supplies:  $495,000 to $685,000

  • The estimate includes the cost to acquire all furniture, fixtures, equipment, and supplies necessary to operate your Restaurant, including interior and exterior signs, Restaurant appliances (dishwasher, grill, fryers, freezer, walk-in cooler/freezer, ice machine, and other similar foodservice equipment), smallwares, fountain beverage equipment, office equipment (including computer hardware and software), custard machine(s), point-of-sale system/cash registers, including the costs for installation, and uniforms, as well as freight charges, but it does not include sales tax.

7.  Miscellaneous Expenses:  $20,000 to $40,000

  • This amount estimates attorneys’ fees, accounting fees, business licenses, restaurant association and local chamber of commerce member fees, utility deposits, and costs associated with your Restaurant’s “Open House.”

8.  Additional Funds (Working Capital) for 3 Months:  $50,000 to $100,000

  • This amount of working capital is projected as sufficient to cover initial operating expenses for a period of 3 months. These figures are estimates, and Culver’s cannot guarantee you will not have additional expenses starting the business.
  • Expenses not included are hourly labor and benefits costs, food and product costs, and rent.

9.  Totals:  $1,845,000 to $4,155,000

  • Culver’s requires that you have 20% of your total projected initial investment in cash or liquid assets.
  • The franchisor has used CFSI’s (including its predecessor and affiliates) more than 30 years of experience in the business to compile these estimates.

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