Bojangles Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)
For Traditional Bojangles Restaurants
1. Franchise Fee: $35,000
- The franchise fee for each Restaurant developed under a Development Agreement or for each Restaurant developed under an Individual Franchise Agreement is $35,000.
- If you sign a Development Agreement, the only investment required under that Development Agreement is payment of the Development Fee and the Franchise Fee for the first Restaurant to be developed pursuant to the Development Agreement. You must agree to develop at least two Bojangles Restaurants if you sign a Development Agreement.
2. Insurance: $4,000 to $7,500
- The figures above are estimates of your insurance costs during the pre-opening phase of your Restaurant for the following insurance: general liability, employers’ liability, workers’ compensation, auto liability (if you own, hire, or lease automobiles for use in your business), and property insurance.
- In some cases, you may be required to pay the entire annual premium initially.
- Costs may vary among different underwriters and may be based on variables including how long you have been in business, your financial condition, your prior risks, and the location of your Restaurant.
3. Pre-opening Salaries, Travel, Living Expenses During Initial Training: $113,000 to $168,000
- You will incur expenses associated with sending five to seven people and your Managing Owner and Principal Operating Officer or Partner to Bojangles’ initial training program.
- For this training program, Bojangles provides instructors and instructional materials, but you will need to arrange for transportation, food, and lodging for yourself and employees. The cost will depend on the distance you must travel and the type of accommodations you choose and will range from $130 to $160 per day per person in training.
- In addition, you must pay any wages due employees during training. The estimate does not include salaries for your Managing Owner or Principal Operating Officer or Partner.
4. Site Selection: $100 to $10,000
- You must submit information about proposed sites to Bojangles on forms or in the manner it designates. Before submission, you must carefully evaluate each site, determine that it meets Bojangles’ established criteria for Restaurant sites and determine that it may be acquired or leased by you.
- The estimate excludes the cost of land, permitting, and broker’s fees and will vary depending upon the number of sites, the extent of the required investigation by you, and the location of the sites in relation to your office.
- The low end of the estimate presumes that you already own the site and do not engage a broker or a third party for site investigation.
- You should consult a real estate professional in your geographic area before purchasing a franchise.
- Typically, an acre of land with approximately 160 feet of frontage is needed for the Restaurant and adjacent parking areas. Real estate costs vary considerably depending on the location.
- The rent for unimproved property may range from $5,000 to $15,000 or more per month. You may be required to pay the first and last months’ lease payments as a security deposit when you sign your lease. Lease expenses also may include common area maintenance, insurance, taxes, fixed rent that may escalate, percentage rent based on the Restaurant’s Gross Sales, and other charges related to the Restaurant.
5. Building: $770,000 to $900,000
- The figures estimate the costs of constructing a free-standing Restaurant including any permanently attached fixtures with approximately 3,000 to 3,600 square feet of internal space on a parcel with approximately 0.7 to 1.8 acres. The actual costs will vary materially depending on the location and size of lot and building and other factors.
- You will need to hire an approved, qualified licensed general contractor.
- Bojangles expects that you will buy or lease unimproved property and construct your Restaurant.
- Costs for converting improved real estate to a Bojangles Restaurant vary widely depending on the age, previous use, and the condition of the property.
- Many of Bojangles’ company-operated Restaurants and some franchised Restaurants are developed as build-to-suit arrangements where the landlord builds the Restaurant in accordance with Bojangles’ approved plans and specifications and Bojangles’ rental rates incorporate the building and related improvements costs, land cost, site costs, soft costs, and any other costs, fees, or expenses associated with construction of the building plus an annual capitalization rate of such costs.
- A build-to-suit lease rate based on Bojangles’ company-operated estimates may range from $8,000 to $11,700 per month with an assumed lease rate based on the estimated building and site improvements costs (comprised of site work plus soft costs) as set forth above with an estimated capitalization rate of 7.5%.
- Your lease rate may be less or more than this based on the costs and expenses your landlord will incur in building your Restaurant, and your capitalization rate may vary based on your own creditworthiness. The capitalization rate available to Bojangles’ affiliate to develop company-operated Restaurants in the last fiscal year has been less than 7%.
6. Site Work: $462,000 to $850,000
- Site work costs include sewer, electrical, water, storm water, curb cuts, parking lot, concrete, grading and excavation, landscaping and irrigation, site electrical and lighting, and utility runs, as well as any required department of transportation work.
7. Soft Costs: $60,000 to $120,000
- These costs include required building permits, impact fees, taxes, bonds, licenses, and other fees, which can vary dramatically depending on the location, as well as legal, accounting, administrative, permitting, architectural, design, and miscellaneous other professional fees that you may incur before you open for business.
8. Equipment, Furniture, Signage, and Fixtures: $440,000 to $550,000
- You must purchase or lease certain items of equipment including kitchen and serving line equipment, point-of-sale system and related software, a decor package, refrigeration and installation, point-of-sale materials, a sound system, a safe, digital interior and drive-thru menu boards, miscellaneous smallwares, equipment, and signage.
- If a high rise (interstate) sign is used, the equipment cost will be on the high end of the range.
- You may be able to convert an existing restaurant property with hood systems and a walk-in cooler and walk-in freezer which may lower the cost of equipment acquisition.
- Bojangles requires that for your first Bojangles Restaurant, you pay in full for the equipment package and avoid equipment financing. Bojangles may, at its option, extend this requirement for additional Restaurants that you develop.
9. Initial inventory: $12,000 to $25,000
- The estimate covers initial inventory of products, including food and paper products, and cleaning, office, and general supplies for the opening of the Restaurant.
10. Utility Deposits and Business Licenses: $2,500 to $13,000
- Generally, you will need to submit deposits for utilities. The amount of the deposits will vary depending upon the practices of the utility companies. Generally, these deposits are refundable under the utility company’s terms.
- The locality in which you place your Restaurant may also require a business license which may require you to pay a fee. There may also be impact fees or other like development fees charged by the municipal authority or utility company.
11. Additional Funds (3 months initial phase): $15,000 to $150,000
- You will need capital to support on-going and miscellaneous expenses to the extent these costs are not covered by sales revenue. These figures are an estimate of the additional funds that you may require for operating expenses during the initial three months of business. They include payroll, taxes, insurance, food, paper, supplies, utilities, point-of-sale system maintenance and support fees, licenses and permits, bank charges, and repair and maintenance expenses. They do not include advertising or royalty fee payments made to Bojangles.
- These figures are estimates, and Bojangles cannot guarantee that you will not have additional expenses starting the business.
- Bojangles relied on its affiliate’s experience in operating Bojangles Restaurants and outside sources of consultation to derive its estimates for these additional funds.
12. Total: $1,913,600 to $2,828,500
For Express Bojangles Restaurants
- Total: $590,100 to $1,299,800