Updated February 10, 2020.
Detailed Estimates of Another Broken Egg Cafe Franchise Costs Based on Item 7 (Estimated Initial Investment) of Another Broken Egg Cafe’s 2019 Franchise Disclosure Document
1. Franchise Fee: $50,000
- The initial franchise fee for your first Cafe is $50,000 and the initial franchise fee for each additional Cafe is $35,000.
2. Rent, Deposits, Licenses, and Permits: $13,600 to $44,500
- Another Broken Egg Cafe estimates the rent, deposits, licenses, and permits for the Cafe to be $13,600 to $44,500 for the initial month.
- Various permits may be required and may include building inspection fees and occupational license fees.
- If you do not already own adequate Cafe space, you will have to purchase or lease land and a building for the Cafe. Typical locations for Cafes are shopping centers, urban commercial areas, and suburban shopping areas.
- These typical Cafes range in size from 3,000 to 5,000 square feet, with seating capabilities of 100 to 200 guests. Freestanding Cafes in suburban locations will require from 42,000 to 60,000 square feet of land for the Cafe and adequate parking facilities, depending on local design requirements.
- The cost of commercial land or Cafe space, whether you lease or buy, varies considerably depending on the location and conditions affecting the local market for commercial property.
- Another Broken Egg Cafe estimates that monthly rent for leased space will range from $6,200 to $14,700 depending upon factors such as the following: whether the Cafe is located within an existing retail business (e.g., shopping mall) and the extent of the menu to be offered.
- You will usually be required to pay a security deposit for leased premises. Typically, the security deposit will be equal to one month’s lease payment but this amount will vary depending upon negotiations with the landlord. Security deposits should not exceed an average of two months’ rent on the property.
- Local, municipal, parish/county, state, and/or federal regulations vary on what licenses and permits are required by you to operate a Cafe. Such license and permit fees are paid to these respective governmental authorities.
3. Leasehold Improvements: $300,000 to $675,000
- The cost of converting a leased facility to use as a Cafe may vary widely depending upon the location, previous use, and condition of the property.
- Freestanding Cafes are ordinarily of masonry or frame construction, and construction costs range between $300,000 and $675,000.
- These costs may also vary depending upon the availability and prices of labor and materials and whether certain costs will be borne by the landlord.
- You are required to pay $5,000 to Another Broken Egg Cafe’s in-house design team for the interior layout, schematic, and interior design package for your Cafe.
- The cost of land, if purchased, and site work vary depending upon the location and condition of the property. Another Broken Egg Cafe cannot estimate the cost of purchasing land or site work, which will vary considerably from location to location.
4. Utility Deposits: $2,500 to $7,500
- You may be required to pay deposits for certain utilities. The amount of these deposits and other utility costs may vary depending on the size and location of the Cafe.
5. Cafe, Furniture, Fixtures, and Equipment: $75,000 to $225,000
- You must purchase certain items of furniture, fixtures, equipment, and smallwares. The manual contains a complete list of the required equipment.
- As the numbers indicate, the cost of these items vary depending on the size and location of the Cafe. Another Broken Egg Cafe has estimated the cost of these items for a typical Cafe to be from $90,000 to $250,000.
- The cost of this equipment may vary widely depending upon whether the equipment is purchased or leased.
- You must obtain at your expense specific computer hardware and software and training in its use. (There is also available online technical support for an annual fee as established by the software licensor.) This also includes the estimated costs for network configuration and initial PCI compliance.
6. Point-of-Sale Computer/Cash Register System, Software, Training, and Installation: $16,500 to $29,500
7. Signage: $6,000 to $30,000
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- You must purchase certain interior and exterior signage for the identification of the Cafe based on Another Broken Egg Cafe’s design criteria.
8. Initial Inventory: $8,000 to $19,500
- You must purchase initial inventory for the operation of the Cafe. The estimated range covers a supply of food and paper products for one to two weeks of Cafe operations.
9. Travel, Living, and Salary Expenses While Training: $12,000 to $37,500
- You are responsible for all transportation, lodging, meals, salaries, and other expenses associated with the initial training program for you and/or your co-owner, managers, and employees. Total costs for the 4-6 week training period are estimated at $12,500 to $37,500.
10. Insurance: $8,000 to $20,000
- During the term of the Franchise Agreement and any renewal term, you are responsible for all insurance premiums set forth and specified in the Manual.
11. Grand Opening Advertising: $10,000
- During the period from 15 days before to 30 days after the opening of the Cafe, you must arrange a Grand Opening promotion, which may include a direct mail campaign, a public relations program, distribution of advertising novelties, specialty items, food and drinks, newspaper advertising, and related campaigns.
- You are obligated to spend a minimum of $5,000 for your Grand Opening promotion although Another Broken Egg Cafe may recommend that you spend more.
- You will pay the $5,000 directly to approved third parties.
12. Legal and Accounting: $2,000 to $12,000
- This item is the estimated cost of basic legal and accounting services provided to you by legal and accounting firms.
13. Additional Funds for 3 Months: $25,000 to $50,000
- This estimates additional funds you may need for the first 3 months of operation, including payroll costs and working capital for other expenses. These figures are estimates and Another Broken Egg Cafe cannot guarantee that you will not have additional expenses starting the franchise business.
14. Total Franchise Business Cost (Excluding Real Estate and Construction of Building on Leased Ground): $528,600 to $1,210,500
- This total assumes that the real property and building will be leased. Amounts for the lease depend on factors such as rental rates and land and building costs in the franchisee’s area, and whether or not the landlord requires the franchisee to pay first and last month’s rent in advance.
Kim cox says
Is there royalty fees
Franchise Chatter says
Yes, there are royalty fees and other ongoing fees. You will find them in a separate post. See below: