Wing Zone Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)

Traditional Location

1.  Franchise Fee:  $40,000

2.  Development Services Fee:  $6,000

• This fee is payable when you sign the Franchise Agreement for Wing Zone’s costs incurred in providing site selection, layout, and design assistance.

3.  Architectural/Engineering Fees and Project Management:  $15,000 to $28,500

• This fee represents the cost of plans and specifications paid to an approved kitchen designer, architect, and engineer.

• Wing Zone may require you to use an approved construction management firm to manage the construction process for your location.

• The cost for the development of construction documents can vary depending on the state or municipality where your Restaurant will be built.

4.  Professional Services:  $2,000 to $5,000

• Professional fees are for attorneys, accountants, or other professionals from whom you seek advice.

5.  Permits and Licensing:  $3,000 to $17,000

• Permits and licensing are fees paid to various local agencies to secure permits related to constructing your leasehold space.

6.  Rent:  varies

• Restaurant occupies approximately 1,200 to 1,600 square feet of leased space, typically in an in-line shopping center in an urban or suburban commercial area.

• Your investment could be substantially higher if you decide to buy property or to lease space in a regional shopping mall, enclosed shopping mall, lifestyle center, or high-rent facility.

• Rent depends on geographic location, space size, local rental rates, other businesses in the area, site profile, and other factors. Wing Zone cannot estimate precisely your initial real estate investment.

• While there are exceptions depending on landlord negotiations, Wing Zone’s franchisees typically do not pay rent before they open for business.

7.  Security Deposits:  $2,000 to $15,000

• Landlords typically charge a security deposit equal to 1 month’s rent and also may have site lease deposits that vary according to location.

• Utility and other companies typically charge security deposits that vary by locale and your credit history.

• Some security deposits will be refundable depending on your agreement with the landlord or the utility and other companies.

8.  Leasehold Improvements:  $100,000 to $180,000

• The cost of leasehold improvements can vary significantly depending on factors like (i) whether pre-construction demolition of existing walls and partitions is required, (ii) whether the space was previously used as a restaurant and already contains facilities required by code like a grease trap, ventilation system, and fire extinguisher system, (iii) whether the space is in a multi-story or a high-rise building (these spaces can significantly increase your costs), and (iv) regional differences in material costs.

• The high and the low amounts reflect estimated leasehold improvement costs without any tenant improvement allowances but do include a 10% contingency (of the total estimated cost) for unexpected cost over-runs or delays.

• Although Wing Zone expects all projects to fall within the indicated range, as Wing Zone continues to expand into new and higher-cost markets, Wing Zone’s experience with these costs could change significantly. Depending on the market in which you develop or the type of Restaurant you develop, you might experience costs exceeding the range listed in the table.

9.  Furniture, Fixtures, Equipment, and Smallwares:  $90,000 to $140,000

• The high and low amounts represent the price to buy new equipment. This range includes the purchase of audio-visual equipment.

10.  Interior Decor:  $3,000 to $6,000

11.  Exterior Signage:  $5,000 to $12,000

12.  Menu Boards:  $800 to $1,500

13.  POS System:  $10,000 to $20,000

• This represents the cost for the fully-integrated required point-of-sale (POS) system with Wing Zone’s required suite of services.

• The low end represents franchisees that have chosen to use the leasing program offered by the POS vendor.

14.  Training:  $10,000

• This represents the training costs for your first Restaurant.

• You do not pay an initial training fee, but you will pay all personal expenses for the training for you and your employees, including transportation to the training restaurant, lodging, meals, wages, and benefits for you and any of your employees during Pre-Opening Mock Operations.

• This amount is the estimated cost for 4 people to attend Wing Zone’s training program.

15.  Opening Inventory:  $7,000 to $10,000

16.  Shop Launch Marketing Plan:  $30,000

• You must spend at least $30,000 on Shop Launch Marketing activities.

• The Shop Launch Marketing Plan typically covers a 4 to 6-month period. Wing Zone will make the spend on your behalf.

• You must pay Wing Zone $15,000 4 weeks before the Restaurant opens and another $15,000 within 10 weeks after the Restaurant opens. Some franchisees have chosen to spend significantly more than $30,000 towards their shop launch marketing and advertising activities.

17.  Pre-Opening Mock Operations:  $3,000

• All restaurants must have at least 2 Pre-Opening Mock Operation and staff training events commonly called a friends and family night. For the friends and family night, Wing Zone estimates food costs of $1,500 and approximately 200 salary hours for 3 days of employee pre-opening training.

18.  Insurance (3 Months):  $1,000 to $2,000

• You must purchase insurance Wing Zone specifies.

19.  Additional Funds for 3 Months:  $15,000 to $35,000

• This is an estimate of the range of initial start-up expenses for 3 months for which you might need additional capital. This includes rent, utilities, wages, inventory purchases, office supplies, printed materials, phone, facsimile, pre-opening and regular salaries for managers, pre-opening and regular wages of hourly employees, debt service, real estate services, legal, internet expense, accounting expense, and other expenses during the initial phase of your operations.

• It is possible to significantly exceed costs in any of the areas listed above.

• This 3-month period is not intended, and should not be interpreted, to identify a point at which your restaurant will break even.

• Wing Zone relied on its subsidiaries’ many years of experience in franchising restaurants to compile this Additional Funds estimate.

20.  Total (excluding real estate purchase and lease costs):  $342,800 to $561,000

• The outlined investment is for a Wing Zone Restaurant at a traditional location. If you open a Restaurant in a non-traditional location, such as a regional shopping mall, enclosed shopping mall, lifestyle center, airport, university, sports arena, virtual kitchen, or a location that operates on a delivery and/or pickup-only basis, the cost could be significantly lower or potentially higher depending upon the location, the required equipment, design, the use of union labor, and facilities fees paid to the location owner.

• A lower-cost Restaurant is one that will require fewer leasehold improvements, less seating, and fewer equipment purchases. Moderate and higher-cost Restaurants may require extensive interior and exterior renovations, interior finishes, and additional equipment.

• In compiling these figures, Wing Zone has relied on its experience in franchising Wing Zone Restaurants. Wing Zone cannot guarantee that you will not have additional expenses starting the business.

“Virtual Kitchen” Location

• Total (excluding real estate purchase and lease costs):  $105,000 to $190,000