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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Famous Toastery Franchise Costs (2016 FDD)

by Franchise Chatter on March 27, 2016

in Breakfast Franchise, Franchise Costs, Lunch Restaurant Franchise

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Famous Toastery from JWL Management

This post was updated on March 6, 2017 to reflect information from Famous Toastery’s 2016 FDD (Item 7).

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

1.  Initial Franchise Fee:  $40,000

2.  Rent – 3 Months:  $15,000 to $37,500

  • The estimates assume that you will lease space for your Restaurant. Your Restaurant must be in a free-standing building or end cap of a shopping mall or strip center, and you will need approximately 3,200 to 3,500 square feet.
  • If you choose to purchase real property on which to build your Restaurant, your initial investment will probably be higher than what the franchisor estimates above.

3.  Security Deposits:  $7,000 to $14,000

  • The estimate includes security deposits you may have to pay to your landlord and your local utility companies, such as water, gas, and electric.

4.  Leasehold Improvements:  $100,000 to $250,000

  • These figures are the franchisor’s best estimate based on remodeling/finish-out rates in the Charlotte, North Carolina area.
  • The low end of the estimate assumes that you have leased space that previously operated as a restaurant and that you will convert to a Famous Toastery Restaurant.
  • The high end of the estimate assumes that you have leased a “vanilla box” space and that more improvements are required.
  • The estimate does not include any tenant improvement allowance that you may negotiate.

5.  Signage:  $6,000 to $15,000

  • These amounts represent your cost for interior and exterior signage. Your landlord or your local ordinances may have different restrictions it places on interior and exterior signage which may affect your costs.

6.  Furniture and Fixtures:  $24,000 to $36,000

  • The furniture and fixtures you will need for your Restaurant include:  bar stools, booths, tables, chairs, artwork, decor items, security system, and cameras.

7.  Equipment:  $95,000 to $160,000

  • The equipment you will need for your Restaurant includes:  grill, 12 burner stove, ovens, convection ovens, refrigerators, freezers, steam table, salamander, commercial toaster, meat slicer, sinks, prep tables, and small wares.

8.  Point-of-Sale System:  $22,000 to $25,000

  • You must obtain the point of sale system that the franchisor specifies.

9.  Business Licenses and Permits:  $3,500 to $8,000

  • These are estimates of the costs for obtaining local business licenses which typically remain in effect for one year. These figures do not include occupancy and construction permits which are included in the blueprints estimate.

10.  Liquor License:  $2,000 to $300,000

  • You must offer alcoholic beverages at your Restaurant unless the franchisor consents to you not offering alcoholic beverages. The cost of a liquor license can range from under $2,000 to over $300,000, depending on the location and jurisdiction, but can be even higher in some states.
  • The franchisor strongly recommends that you verify the cost and availability of a liquor license in your jurisdiction before signing the Franchise Agreement.

11.  Professional Fees:  $5,000 to $15,000

  • The franchisor strongly recommends that you engage an accountant and a franchise attorney to advise you in your evaluation of the franchise being offered.

12.  Architectural/Design Fees:  $8,000 to $30,000

  • These are the estimate of your costs to obtain architectural and design services necessary for the construction of the Restaurant.

13.  Insurance – 3 Months:  $2,500 to $5,000

  • These figures are estimates of the cost of the quarterly premiums for the insurance you must obtain and maintain for your Restaurant. Insurance premiums may be payable monthly, quarterly, semi-annually, or annually, based on the insurance company’s practices and your creditworthiness.

14.  Inventory:  $9,000 to $25,000

  • These amounts represent your initial inventory of food and beverage supplies, paper products, cleaning materials, and supplies.

15.  Training Expenses:  $57,000 to $85,000

  • The franchisor provides initial training for up to four people at no additional charge. These estimates include only your out-of-pocket costs associated with attending the initial training program, including travel, lodging, meals, and applicable wages.
  • These amounts do not include any fees or expenses for training any other personnel.
  • Your costs may vary depending on your selection of lodging and dining facilities and mode and distance of transportation.
  • The training program lasts for up to 10 weeks.
  • The estimate also includes the $25,000 fee for the franchisor’s team of representatives to provide opening assistance.

16.  Grand Opening Marketing:  $5,000 to $10,000

  • You must conduct a grand opening marketing campaign, which must be conducted in the initial 60 days of operation.

17.  Additional Funds – 3 Months:  $20,000 to $30,000

  • You will need capital to support ongoing expenses, such as payroll, utilities, rent, royalty fees, and brand development fees, if these costs are not covered by sales revenue for your first three months of operation.
  • This is only an estimate and there is no guarantee that additional working capital will not be necessary during this start-up phase or after.

18.  Total:  $421,000 to $1,085,500

  • The franchisor relied upon its affiliates’ experience in operating similar restaurants in North Carolina since 2008 when preparing these figures.

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