Detailed Estimates of PrimoHoagies Franchise Costs Based on Item 7 (Estimated Initial Investment) of PrimoHoagies’ 2019 Franchise Disclosure Document
1. Initial Franchise Fee: $35,000
2. Furniture, Fixtures, and Equipment: $90,000 to $170,000
- As described in the PrimoHoagies training manual, you must purchase start-up equipment, fixtures, and signs necessary for the start-up of your Franchised Business, including a refrigerator, slicers, scale, freezer, oven, sinks, telephone, and fax machine.
- This amount may be lower if you are converting an existing business and already own certain start-up equipment, fixtures, and signs.
- You are also required to purchase all signs, fixtures, and equipment from an Approved Supplier, unless otherwise stated in writing.
3. Inventory: $12,000 to $25,000
- At the time the Franchised Business opens, you must stock the initial inventory of menu items, products, accessories, equipment, and supplies as required by PrimoHoagies in the Manual or otherwise in writing.
- This estimate includes the approximately $12,000 to $25,000 that you must pay to Nellie’s Provisions for opening inventory.
- After the Franchised Business opens, you must order all required food products on a weekly basis in sufficient quantities to meet reasonably anticipated customer demand for the following 12-day period.
4. Lease Deposits, First Month’s Rent: $4,000 to $12,000
- If you do not already own a site for your Franchised Business, you must lease or acquire a site for your Franchised Business for the term of the Franchise Agreement.
- In the event that you lease the premises for the Franchised Business, PrimoHoagies has provided an estimated cost of one month’s rent and one month’s security deposit for 1,300 to 2,000 square feet.
- The monthly rent for leased premises will vary depending on the location of the premises and current local real estate rental market conditions.
- You may also be required to pay other rental payments upon signing a lease, such as real estate taxes, percentage rent, utilities, maintenance, and insurance. These additional charges will cause you to incur higher costs.
- PrimoHoagies has not provided an estimate of costs incurred for purchasing the premises for the Franchised Business.
5. Architectural Plans and Design: $7,000 to $15,000
- Before commencing construction of the Franchised Business, you must employ (and pay directly) a qualified, licensed architect or engineer that PrimoHoagies designates, to prepare preliminary and final architectural drawings and specifications for the Franchised Business.
- You will also need to hire a local architect to ensure that any final architectural plans comply with local codes and ordinances, which may vary depending on your location and may cause your costs to be higher than the estimate.
6. Leasehold Improvements, Permits, Designs, and Painting: $50,000 to $230,000
- Leasehold improvements include construction build-out costs, store construction and fixtures, including electrical, plumbing, countertops, customer service area, tables, and chairs. Your costs will vary depending on the location of the Franchised Business.
7. Grand Opening Advertising: $10,000
- You must pay PrimoHoagies a Grand Opening Advertising Fee of $10,000 at least 60 days prior to the opening of the Franchised Business.
- If you are purchasing the right to operate an existing PrimoHoagies Restaurant, then you must pay PrimoHoagies a reduced Grand Opening Advertising Fee of $5,000 within 60 days of the date that you sign or assume the Franchise Agreement.
8. Printing/Supplies: $500
- This estimate includes miscellaneous supplies and printing costs.
9. Professional Fees: $0 to $5,000
10. Signage: $5,000 to $20,000
11. Insurance, Licenses, and Utility Deposits: $1,500 to $7,000
- This is an estimate of insurance premiums for the initial 3 months of business operation from a third-party provider for such insurance, as well as estimates for businesses licenses and utility deposits.
- Your costs will vary depending on your market, the size of the premises, the amount of insurance coverage you select, your insurance carrier, and other factors.
12. Travel, Lodging, and Meal Expenses During Training: $500 to $5,000
- This estimate includes the travel, food, and lodging expenses of one person to attend the initial training course for approximately 10 days.
13. Additional Funds (3 months): $20,000 to $40,000
- Your initial start-up expenses during the first 3 months of operation of your Franchised Business will include payroll costs and working capital.
- This figure is an estimate and PrimoHoagies cannot guarantee that you will not have additional expenses in starting your business.
- Your costs will depend on factors such as: how closely you follow PrimoHoagies’ methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market; the prevailing wage rate; competition; and the level of sales reached during the start-up phase of the business.
- PrimoHoagies relied on the experience of its officers to compile these estimates, largely based on the past opening investment of PrimoHoagies’ existing franchisees.
- You should also have adequate funds available to cover living expenses in addition to adequate operating capital. The amount necessary will vary according to your personal needs, mode, and source of living.
14. Total: $235,500 to $574,500