Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Bambu Desserts & Drinks Franchise Costs (2016 FDD)

by Franchise Chatter on August 6, 2016

in Beverage Franchise, Franchise Costs

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Detailed Estimates of Bambu Desserts & Drinks Franchise Costs Based on Item 7 (Estimated Initial Investment) of Bambu Desserts & Drinks’ 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $75,000

  • The initial fee for a single Shoppe is $75,000.
  • If you qualify for and sign a Development Agreement, you pay the initial fee of $75,000 for the first Shoppe, plus $15,000 towards the initial franchise fees for the subsequent Shoppes to be developed under the Development Agreement.
  • The remaining portion of each initial franchise fee is due when each subsequent Franchise Agreement is signed and training is scheduled.

2.  Leasehold Improvements:  $20,000 to $125,000

  • These are the estimated costs to build out space in an in-line leased location. Depending on your location and other factors, your actual costs may vary from the estimated range.
  • Typically, a Bambu Shoppe will have approximately 900 to 1,300 square feet of kitchen, counter, and retail space. Ideally, limited outdoor or patio seating is also available.
  • The lower estimate in the chart assumes that you have obtained build-to-suit leased space or “move-in” Shoppe space.
  • Any design and architectural fees that you will incur are included in the estimate. Presently, the franchisor provides a drawing of a prototypical configuration.
  • If your Shoppe opens in a strip mall or any building other than a major mall, the landlord will sometimes pay a portion of your tenant improvements. If your Shoppe is in a major mall or Triple A location, the landlord will usually not pay for any of your tenant improvements, resulting in higher construction costs to you.

3.  IT and POS Systems:  $1,500 to $3,000

  • This item includes the estimated costs to purchase or license a computerized point-of-sale (“POS”) system and software, hardware and software for an online ordering system that the franchisor may require in the future, a telephone system, a personal computer, a smartphone or other similar device with email capability, including a data plan with a reputable high-speed wireless carrier and in-Shoppe wireless Internet service, and facsimile capability.
  • All of these costs are paid to third-party suppliers.

4.  Equipment, Fixtures, and Furniture:  $25,000 to $75,000

  • This item includes the estimated costs to obtain the required fixtures, furniture, and kitchen equipment for a Shoppe, including:  refrigeration, ice machines and freezer space, work tables, sinks, and microwaves.
  • This estimate includes freight and installation, but does not include state or local taxes. The lower range in the chart assumes that you are equipping the Shoppe with used and/or leased equipment.

5.  Signage and Menu Board:  $5,000 to $10,000

  • The chart provides the estimated costs to obtain signs and a digital menu board for a Shoppe, including custom signs, interior and exterior signs, and Shoppe displays.

6.  Opening Inventory and Supplies:  $6,500 to $10,000

  • You must open with and maintain an adequate inventory of menu items, food, coffee and other ingredients, beverages, paper goods, small cooking supplies, uniforms, and branded products and merchandise for retail sale to your customers.

7.  Security Deposits, Utility Deposits, Business Licenses, Insurance, and Professional Fees:  $7,000 to $15,000

  • Security deposits, if applicable to your Shoppe, range from nothing to three months’ rent. Utility deposits range from a nominal amount to approximately $2,000; and business licenses range from approximately $100 to $1,000, depending on your location.

8.  Initial Training Expenses:  $2,000 to $3,500

  • Your travel and living expenses when you attend the initial training program in Chicago, Illinois or other designated locations will vary depending on the length of your instruction, the distance you must travel, and the standard of living you desire while you attend the program.
  • As of the date of the Disclosure Document, the training will take place at a training facility the franchisor designates.

9.  Initial Marketing Campaign:  $1,000 to $2,500

  • The franchisor estimates that you should spend at least $1,000 for an initial marketing program for your Shoppe, to take place on the dates it designates before and after your Shoppe opens.
  • You must use media and materials the franchisor approves.

10.  Additional Funds – 3 Months:  $10,500 to $15,500

  • This is an estimate of your pre-operational expenses, which the franchisor has not listed above, as well as additional funds necessary for the first three months of your Shoppe operations.
  • This item includes a variety of expenses and working capital items during your start-up phase such as:  legal and accounting fees; additional rent expenses; insurance premiums; the first month’s payment of the Marketing Fee which begins in the third month after the Shoppe opens; additional advertising and promotional expenses and materials; utility charges; and other miscellaneous costs.
  • This item does not include your salary or living expenses.

11.  Total Estimated Initial Investment:  $153,500 to $334,500

  • The franchisor relied on its principals’ combined over 35 years of experience in the food franchising business when preparing these figures.
  • In certain major metropolitan areas, actual costs may exceed the high range estimates in the chart.

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