Franchise Costs: Detailed Estimates of Bombshells Restaurant & Bar Franchise Costs (2018 FDD)

Detailed Estimates of Bombshells Restaurant & Bar Franchise Costs Based on Item 7 (Estimated Initial Investment) of Bombshells Restaurant & Bar’s 2018 Franchise Disclosure Document

New Construction

1.  Development Fee:  varies

• The amount of your development fee will vary depending upon the number of Restaurants you must open under the Development Agreement.

• If you sign a Development Agreement, you must pay a development fee equal to the total of 100% of the initial franchise fee for the first Restaurant to be developed, plus 50% of the initial franchise fee for each additional Restaurant to be developed.

• Bombshells will credit the allocable portion of your development fee against your initial franchise fee for each Restaurant to be opened under the Development Agreement.

2.  Initial Franchise Fee:  $50,000

• If you open only one Restaurant, the initial franchise fee is $50,000.

3.  Leasehold Improvements:  $1,400,000 to $1,900,000

• There are four Bombshells Restaurants in operation that are currently owned by the Bombshells Entities. This estimate is based on the Bombshells Entities’ experience in establishing Bombshells Restaurants in Texas.

• Bombshells Restaurants are typically located in commercially-zoned shopping or entertainment areas.

• The Leasehold Improvements amounts for New Construction include the site improvement costs and the costs to build a building, but they do not include amounts to purchase land.

• The New Construction Leasehold Improvements is based on the cost of adapting Bombshells’ prototypical architectural and design plans (including architect fees) to build a facility containing approximately 7,500 to 10,000 square feet.

• The estimates assume that the landlord will provide connections to adequate electrical, gas, water, and sewage service.

• Your actual costs may or may not include site preparation and finish-out costs, depending on the arrangements you negotiate with your landlord. If your landlord contributes to the cost of finish-out, total leasehold improvement costs could be reduced.

• The above estimates assume that you will use an approved general contractor and architect. If you use an architect that is not on Bombshells’ list of approved architects, Bombshells may require that you or your architect pay it a $5,000 fee to train your architect.

4.  Equipment, Furniture, Fixtures, and Signage:  $560,000 to $735,000

• These amounts include the cost of furniture, fixtures, equipment, decor items, signage, POS system and multiple terminals, computer hardware and software, and the audio-visual package required for your Bombshells Restaurant.

5.  Liquor License:  varies

• Bombshells is unable to estimate the cost of your liquor license because of wide variations in costs depending on factors like location, the availability of liquor licenses, the ability to move a license, and the market value of liquor licenses.

6.  Business Licenses and Permits:  $3,000 to $4,000

• This amount represents the estimated cost of health and various operating licenses required at the local, regional, or state level.

7.  Initial Training Costs:  $25,000 to $50,000

• Bombshells provides initial training to your initial Operating Principal, District Manager (if applicable), and Restaurant managers at no additional charge.

• The initial training takes place in Houston, Texas and may last up to eight weeks for your Operating Principal, District Manager, and Restaurant and other managers.

• You must pay all expenses you or your employees incur in the initial training program, like travel, lodging, meals, and wages. These costs will vary depending upon your selection of salary levels, lodging, dining facilities, and mode and distance of transportation.

• Due to the wide variances in wages, the range of estimated costs does not include wages or salaries; the lower dollar amount assumes trainees live near Houston, Texas and that no hotel or transportation costs are incurred.

8.  Opening Training Team Costs:  $60,000 to $75,000

• Bombshells provides an Opening Training Team of its trained representatives to conduct on-site pre-opening and opening training, supervision, and assistance to you for between 10 and 14 days based on its assessment of your needs in connection with the opening of your Restaurant.

• The Opening Training Team support is provided only in connection with the opening of your first three Bombshells Restaurants.

• You must pay for the hourly wages, costs of travel, lodging, and per diem of the Opening Training Team.

9.  Initial Inventory and Supplies:  $45,000 to $90,000

• Bombshells estimates that this range will cover the cost of food, beverages, condiments, supplies, and other miscellaneous items for approximately the first 7 to 10 days of operations.

10.  Professional Services:  $8,000 to $18,000

• This estimate includes the costs to establish your franchisee entity and to have the franchise documentation reviewed. This fee also includes the cost of hiring a company that specializes in helping restaurant operators submit and obtain licenses and permits.

11.  Grand Opening Promotion:  $15,000

• You must carry out a grand opening promotion for the Restaurant within four to six weeks after you open the Restaurant.

• Your grand opening promotion must be in compliance with Bombshells’ written specifications. Bombshells must approve all advertising items, methods, and media.

12.  Insurance:  $4,500 to $7,500

• This amount represents an estimate of the down payment on your annual insurance premiums. You must obtain the insurance coverage described in the Franchise Agreement.

13.  Market Plan Fee:  $500

• As part of Bombshells’ site review process, Bombshells will require you to pay it $500 for each market plan report it generates for the Territory (if you sign a Development Agreement with it) and $500 for each market plan report it generates for each proposed site.

14.  Architect Training Fee:  $0 to $5,000

• You may request approval of an architect who is not on Bombshells’ list of approved architects as long as the architect has experience in designing plans and blueprints for the construction of full-service restaurants.

• If you use an architect that is not on Bombshells’ list of approved architects but that Bombshells approves, it may require you or your architect to pay it a $5,000 fee to train your architect.

15.  Audio/Visual Review Fee:  $0 to $1,000

• Bombshells may require you to pay it $700 to $1,000 to review your audio/visual and technical components layout and plan (“A/V Plan”) if your A/V Plan provider and installer is not on its list of approved vendors.

16.  Additional Funds – 3 Month Period:  $80,000 to $150,000

• You will need additional funds during the start-up phase of your business to pay employees, purchase supplies, and pay other expenses, such as monthly rent and security deposits.

• These amounts do not include any estimates for debt service. You must also pay the royalty and other related fees described in Item 6 of the disclosure document.

17.  Total:  $2,251,000 to $3,101,000