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Franchise Costs: Detailed Estimates of MidiCi Neapolitan Pizza Franchise Costs (2017 FDD)

by Franchise Chatter on April 3, 2016

in Fast Casual Restaurant Franchise, Franchise Costs, Pizza Franchises

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MidiCi Neapolitan Pizza

This post was updated on September 1, 2017 to reflect information from MidiCi Neapolitan Pizza’s 2017 FDD (Item 7).

Detailed Estimates of MidiCi Neapolitan Pizza Franchise Costs Based on Item 7 (Estimated Initial Investment) of MidiCi Neapolitan Pizza’s 2017 Franchise Disclosure Document

Standard Restaurant

1.  Initial Franchise Fee:  $46,000

  • The Initial Franchise Fee is $46,000 for an individual Restaurant franchise.
  • If you enter into an Area Development Agreement and agree to open 2 Restaurants, your Initial Franchise Fee will be $40,000 for each Restaurant and if you agree to open 3 Restaurants, your Initial Franchise Fee will be $34,000 for each Restaurant. If you agree to open 4 Restaurants, your Initial Franchise Fee will be $31,000 for each Restaurant, and if you agree to open 5 Restaurants, your Initial Franchise Fee will be $28,000 for each Restaurant.
  • The Development Fee is the total of the Initial Franchise Fees for each Restaurant you plan to open.
  • When you sign the Franchise Agreement, the portion of the Development Fee attributable to that Restaurant will be credited against the Initial Franchise Fee for that Restaurant.

2.  Training Expenses:  $5,000 to $9,200

  • The franchisor will not charge you a fee for you and up to 4 designated managers 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

4.  Rent Deposit:  $8,250 to $15,136

  • 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:  $426,000 to $542,000

  • Leasehold improvement costs, including floor coverings; wall treatments; counters; ceilings; painting; window coverings; electrical, carpentry, and similar work; and architect’s and contractor’s fees, depend on the site’s condition, location, and size; the demand for the site among prospective lessees; the site’s previous use; the build-out required to conform the site for your Restaurant; the cost of the architect; and any construction or other allowances the landlord grants.
  • The lower figure assumes that you have a unique real estate model; the higher figure assumes a high square footage model.

6.  Tenant Improvement Allowance:  ($119,000) to ($234,000)

  • The tenant allowance reflects the fund the franchisee is offsetting against the leasehold improvements. The amount of the tenant allowance is negotiated between you and the landlord and is contained in the lease.
  • The tenant allowance range does not include any free rent, actual work or upgrades the landlord is doing to the entire building.
  • The range reflects the amounts which typically can be negotiated with the landlord. However, there is no assurance that your landlord will give you this amount or any tenant allowance.

7.  Furniture, Fixtures, and Equipment:  $216,000 to $218,000

  • These amounts include the cost of all of the kitchen equipment, office equipment, furniture, and a telephone system, but do not include the Computer System.

8.  Computer (POS) System:  $19,000 to $20,000

9.  Signage:  $6,300 to $9,100

10.  Opening Inventory:  $10,000 to $11,000

11.  Uniforms, Merchandise, Equipment, and Supplies:  $2,700 to $3,100

12.  Initial Marketing:  $8,000

13.  Utility Deposits, Security Deposits, Business Licenses, and Liquor License, etc.:  $6,500 to $7,500

  • You must obtain business licenses as dictated by local regulations. You will need to provide monies for deposits for utilities and liquor license.
  • Liquor license costs will generally range from $0 to $7,500. The cost will be zero if you locate your Restaurant where there is already a liquor license. However, in isolated instances, you may have to pay an amount that is substantially higher for a liquor license. You must check with the local licensing regulatory agency to determine the cost of your liquor license.

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 and the owner’s draw). This estimate includes payroll costs, benefits, insurance, additional utility costs, inventory, and supplies.

15.  Total:  $733,700 to $779,986

  • The franchisor relied on its affiliate’s experience in establishing a MidiCi Restaurant since 2015 to compile these estimates.

MidiCi Plus Model

  • The total estimated initial investment necessary to begin operation of a MidiCi Restaurant under the MidiCi Plus model ranges from $826,700 to $873,986.
  • While the menu items and the brand offering are the same in both restaurant packages, the MidiCi Plus model includes differences in equipment and finishes (“Enhancements”). The Enhancements include, but are not limited to, additional custom-made refrigeration storage, enhanced finish for the restrooms, enhanced finish to the Pizza Ovens, and enlarged preparation equipment.

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