Happy Joe’s Pizza & Ice Cream Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)
For a Full-Size Restaurant
1. Initial Franchise Fee: $25,000
- You will pay an Initial Franchise Fee of $25,000 when you sign the Franchise Agreement.
2. Rent: $11,400 to $36,000
- Rent expense for the Premises will vary based on location, square footage, lease arrangements, minimum payments required, age and condition of the structure, utility and miscellaneous expenses, and other factors.
- The average suggested facility contains approximately 1,500 to 2,000 square feet of space for a DELCO Facility and 4,000 to 4,500 square feet for a Full-Size Restaurant.
- Happy Joe’s estimates that the above amounts will be sufficient to cover the rental payments for 3 months.
- This estimate range does not include purchasing a site. If you choose to purchase ground and construct a new building, the estimated cost for the land and the estimated cost for construction of a building ranges from $840,000 to $1,900,000.
- Plans and specifications will cost you additional monies and may be purchased from an approved architect of your choice.
3. Lease and Utility/Security Deposits: $7,500 to $22,500
- Your landlord and utility companies may require that you place a deposit before occupation of the Premises and before installing telephone, gas, electricity, and related utility services. These deposits may be refundable under the agreements made with the landlord and utility companies.
4. Leasehold Improvements: $130,000 to $350,000
- The cost of construction and leasehold improvements may vary widely depending upon the size and condition of the Premises, the local cost of contract work, cost of materials, quality of materials purchased, the location of the business, brands of fixtures leased or purchased, and financing terms available.
- The above range of figures for a business is the cost of reasonable renovation or leasehold improvements, including the services of an architect, store designer and/or decorator, floor coverings, construction, painting, lighting, electrical wiring, installation of display counters, doors, locks, and other materials. However, the actual cost you incur may be lower or higher than estimated.
5. Initial Inventory: $11,800 to $28,000
- Your requirements for initial inventory are described in the Manuals and include the Proprietary Products.
6. Furniture, Fixtures, and Equipment: $200,000 to $450,000
- This estimate includes expenses for office equipment, small wares, uniforms, furniture, the point of sale system, a safe, and other fixtures and equipment necessary for the Franchised Restaurant. Your actual expense will depend on the equipment present at the Premises when you assume the lease.
- The low estimate assumes 50% of the equipment will be financed. The high estimate assumes that you will offer the full array of menu items and will need to purchase all of the equipment needed to prepare these items.
7. Insurance: $2,750 to $6,250
- You must procure and maintain insurance coverage in minimum amounts described in the Manuals or otherwise in writing.
- The low estimate contemplates a 3-month down payment. The high estimate contemplates premium payments for 12 months and includes liquor liability coverage.
8. Training: $15,000 to $30,000
- You are responsible for arranging transportation and paying the expenses for meals and lodging for any persons attending the training program. The amount spent will depend on the distance you must travel and the type of accommodations you choose.
- The estimate for the Full-Size Restaurant contemplates attendance by 3 persons for 6 weeks traveling to Happy Joe’s designated location in Bettendorf, Iowa. The estimate for the DELCO Facility contemplates attendance by 2 persons for 6 weeks traveling to Happy Joe’s designated location in Bettendorf, Iowa.
- This estimate also includes the amount you must pay to Happy Joe’s to cover the cost of Happy Joe’s sending a representative to your Franchised Restaurant to provide initial assistance for approximately 7 days around the time of opening of your Franchised Restaurant.
9. Grand Opening Advertising: $5,000 to $12,000
- You must spend a minimum of $5,000 ($2,500 for Rebranding Franchisees) on advertising before you open the Franchised Restaurant and during the first 15 days of operation. You must follow Happy Joe’s guidelines in conducting the Grand Opening Advertising.
10. Signage: $10,000 to $60,000
- Signage includes interior and exterior signs that bear the Marks. The cost of signage may vary depending on the type, size, and location of the signs, and may also be affected by local restrictions.
11. Additional Funds for 3 Months: $79,800 to $146,100
- This amount is projected to cover operating expenses, including employees’ salaries, rent, and utility expenses, for the first 3 months of operation.
- This estimate is based on the experience of Happy Joe’s affiliates and franchisees in opening and operating Happy Joe’s Restaurants. However, Happy Joe’s cannot guarantee that this amount will be sufficient.
- This estimate does not include a draw or salary for you. You should have additional sources for payment of personal expenses.
12. Liquor License: $0 to $35,000
- The liquor license is required for a Full-Size Restaurant selling beer and wine. The fees and related costs will vary depending on the jurisdiction.
13. Total (assumes rental of Premises and not a purchase): $498,250 to $1,200,850
- Happy Joe’s does not offer any financing for your initial investment, and the availability and terms of financing to you will depend upon factors such as the availability of financing in general, your creditworthiness, the collateral security that you may have, and policies of lending institutions concerning the type of business you will operate.
- The investment and expenditures required of actual franchisees may vary considerably from the projections set out above, depending on many factors, including geographical area, the amount of space leased, and the business capabilities of any particular management and service team.
For a DELCO (Delivery/Carryout) Restaurant
- Total (assumes rental of Premises and not a purchase): $293,250 to $641,535