Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Hardee’s Franchise Costs (2016 FDD)

by Franchise Chatter on September 18, 2016

in Franchise Costs, Hamburger Franchise

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Hardee's Burger Photo by powerplantop

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

1.  Initial Franchise Fee:  $10,000 to $35,000

2.  Opening Training Support Team Fee:  $0 to $10,000

3.  Real Property:  Variable

  • The franchisor expects that you will buy or lease unimproved property and construct the Franchised Restaurant. Typically, 30,000 to 42,000 square feet of land is needed for the Franchised Restaurant and adjacent parking facilities.
  • The purchase price of unimproved property of the size required may range from $650,000 to $1,100,000 or more. The rent for unimproved property may range from $4,000 to $15,000 or more per month.
  • You may be required to pay the first and last months’ lease payments upon signing your lease agreement.
  • Lease agreement for the land may include the following expenses:  taxes, insurance, maintenance, fixed rent (with escalations), percentage rent, and other charges related to the operation of the Franchised Restaurant.

4.  Building:  $434,500 to $484,000

  • The figures are for a free-standing building and include site preparation for the building only. HVAC installation only is included in the building cost.
  • These figures do not include the extra cost for the addition of a cash window in conjunction with a single or double drive-thru lane, which would add from $65,000 to $115,000 in costs.

5.  Site Improvements:  $308,000 to $450,000

  • Site improvement costs include all required work to provide fill and compaction, curb cuts, parking lot, curbs and gutters, sidewalks, drive thru lane, landscaping and irrigation, site electrical and lighting, grease interceptor, and utility runs.

6.  Soft Costs:  $80,000 to $100,000

  • You should check with the relevant regulatory agencies to identify costs for required building permits, impact fees, taxes, bonds, licenses and other fees, which can vary dramatically depending on the location.

7.  Equipment:  $380,000 to $410,000

  • You must purchase certain items of furniture, fixtures, and equipment, the point of sale system, and smallwares.
  • You may be able to lease from or finance through a third party a portion of these purchases, but you should expect to make a down payment of up to 25%.
  • The high end of these figures also includes the cost of a catalytic converter for the charbroiler. If required, the cost of the catalytic converter is approximately $1,685.

8.  Signage:  $40,000 to $110,000

  • The type of signage installed is governed by local ordinances regarding height and size restrictions. The typical sign package includes exterior building signs and a 25-foot pole or monument sign.
  • A typical unit with a drive-thru has 2-4 illuminated directional signs.

9.  Point of Sale System:  $20,000 to $45,000

10.   Initial Training:  $20,000 to $60,000

  • You must pay the costs of travel, living, and other expenses for you and your employees during training. The cost of these expenses will depend on the distance you must travel, the type of accommodations, the number of your employees attending training, and their wages.

11.  Pre-Opening Costs:  $9,000 to $20,000

  • These costs include uniforms, office supplies, and other prepaid expenses. This range also includes $7,000 to $15,000 for the initial inventory of food and paper products.
  • These costs do not include utility deposits, installation of telephones, business licenses, or cleaning supplies, which are not substantial.

12.  Additional Funds for 3 Months:  $125,000 to $225,000

  • These figures are an estimate of your opening expenses for the initial 3 months of business. They include payroll, taxes, insurance, food, paper, supplies, utilities, licenses and permits, bank charges, and repair and maintenance expenses.
  • They do not include advertising contributions or royalty fees paid to the franchisor.
  • These figures are estimates and the franchisor cannot guarantee that you will not incur additional expenses in connection with starting the business.

13.  Total Estimated Initial Investment:  $1,426,500 to $1,949,000 (does not include real estate costs)

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