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Franchise Costs: Detailed Estimates of MidiCi Neapolitan Pizza Franchise Costs (2016 FDD)

by Franchise Chatter on April 3, 2016

in Fast Casual Restaurant Franchise, Franchise Costs, Pizza Franchises

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MidiCi Neapolitan Pizza

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

1.  Initial Franchise Fee:  $46,000

  • The Initial Franchise Fee is $46,000 for an individual Restaurant franchise.
  • If you sign a Multi-Unit Agreement, the Initial Franchise Fee you will pay will depend on the number of Restaurants you agree to open. If you agree to open three Restaurants, your Initial Franchise Fee will be $36,000 for each Restaurant. If you agree to open five Restaurants, your Initial Franchise Fee will be $28,000 for each Restaurant.
  • You must pay the total Initial Franchise Fees (also referred to as the Multi-Unit Fee) for all of the Restaurants you agree to open under the Multi-Unit Agreement at the time you sign the Multi-Unit Agreement.

2.  Training Expenses:  $3,500 to $6,000

  • The franchisor will not charge you a fee for you and one additional person to attend the initial training program. You, however, are responsible for all hotel, transportation, and other costs and expenses for the people you designate to attend the initial training program.

3.  Development Services Fee:  $3,950

  • At the time you sign the Franchise Agreement, you must pay the franchisor the Development Services Fee. The Development Services Fee is earned upon receipt and is non-refundable.

4.  Rent Deposit:  $9,166 to $27,498

  • A MidiCi Restaurant occupies about 3,000 to 4,600 square feet of space. Rent depends on geographic location, size, local rental rates, businesses in the area, site profile, and other factors, and could be considerably higher in large metropolitan areas than in more suburban or small town areas.
  • Restaurants can be located in strip shopping centers, shopping malls, free-standing units, and other venues in downtown commercial areas and in residential areas.
  • The franchisor anticipates that you will rent the Restaurant’s premises.

5.  Leasehold Improvements:  $225,000 to $311,000

  • The lower figure assumes that you have a unique real estate model; the higher figure assumes a high square footage model.
  • The estimates included in the table reflect the average deduction provided by landlords for tenant improvements and other allowances.

6.  Furniture, Fixtures, and Equipment:  $175,000 to $190,000

  • These amounts include the ovens that you must purchase from the franchisor’s required supplier. These amounts also include the cost of refrigerators, freezers, and other equipment, such as office equipment and furniture and a telephone system.

7.  Computer (POS) System:  $17,000

  • You must purchase a Computer System that meets the franchisor’s specifications and requirements.

8.  Signage:  $8,000 to $14,000

  • This includes inside and outside signage. The monies are usually not refundable after they have been expended.

9.  Opening Inventory:  $10,000

  • This includes food and beverage products, paper products, cleaning supplies, and printing uniforms, promotional material, and other supplies.

10.  Uniforms, Merchandise, Equipment, and Supplies:  $7,000

  • You must purchase your uniforms, merchandise, equipment, and supplies from the franchisor.

11.  Initial Marketing:  $8,000

  • This represents the monies to be included in initial marketing for the first three months of operation. This includes funds to be used for your “Grand Opening Marketing Campaign.”
  • Amounts spent on your Grand Opening Marketing Campaign will count toward your first year’s local advertising requirements.

12.  Utility Deposits, Security Deposits, Business Licenses, and Liquor License, etc.:  $5,000 to $11,000

  • You must obtain business licenses as dictated by local regulations. You will need to provide monies for deposits for utilities and insurance.
  • The estimate contemplates insurance costs for three months.
  • Liquor license costs will generally range from $0 to $7,500. The cost will be zero if you either locate your Restaurant where there is already a liquor license or if you choose not to sell alcohol. However, in isolated instances, you may have to pay an amount that is substantially higher for a liquor license.

13.  Inspection Fee:  $0 to $1,500

  • The franchisor will inspect your Restaurant prior to opening. If your Restaurant does not pass initial inspection, you will be charged for all costs and expenses the franchisor incurs in conducting any subsequent inspection, which amount will not exceed $1,500.

14.  Additional Funds for 3 Months:  $95,000 to $122,000

  • This item estimates your expenses during the initial period (first three months) of operation of your MidiCi Restaurant (other than the items identified separately in the table). This estimate includes payroll costs.

15.  Total:  $612,616 to $774,948

  • The franchisor relied on its affiliate’s experience in establishing a MidiCi Restaurant to compile these estimates.

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