How much does it cost to start a franchise?

The franchise fee and its refund policy are described in greater detail in  ITEM 5. We do not finance any fee.  

The franchised business can be operated from a small commercial retail  space suitable for food service operations. The franchised business location will require between 450 and  1,900 square feet. It is difficult to estimate lease acquisition costs because of the wide variation in these costs  between various locations. The range is based upon the condition of the space you lease. For example, if the  space was previously used for a restaurant, the costs will be lower; if the space is a “vanilla shell,” the costs  will be higher. Some lessors may refund the security deposit if you cancel the lease before you occupy the  premises, but the amounts you pay are typically non-refundable. The estimated range of costs in this category  only includes your costs to enter into a lease agreement for the facility. Estimated rental costs for 3 months  are included with the category “Additional Funds,” (see Note 16 below).  

If you are a new customer of your local utilities, you will generally have  to pay deposits to obtain services, including electric, telephone, high speed internet service, gas, trash and  water. The amount of the deposit and whether the deposit is refundable will vary depending on the local  utilities. You should contact your local utilities for more information.  

You may need to make improvements to adapt your facility for  operation of the franchised business. The cost of the leasehold improvements will vary depending on factors,  including the size, condition and location of the facility, local wage rates and the cost of materials. The  amounts you pay for leasehold improvements are typically non-refundable. You should inquire about the  refund policy of the contractor at or before the time of hiring. 

You will be required to invest in a basic initial inventory package  containing your critical food inventory used in the initial months or weeks of operations of your business.  Information on Inventory is included in the Confidential Operations Manual.  

You must purchase the following types and amounts of insurance:  

1. such insurance as necessary to provide coverage under the indemnity provisions set forth in the Franchise Agreement. 

2. comprehensive general liability insurance with a minimum liability coverage of $1,000,000 per occurrence, or higher if your state law requires; 

3. worker’s comp insurance in the amounts required by your local market or State. 

Factors that may affect your cost of insurance include the size and location of the franchised  business, value of the leasehold improvements, equipment, supplies, vehicle model and make, number of  employees and other factors. The amounts you pay for insurance are typically non-refundable. You should  inquire about the cancellation and refund policy of the insurance carrier or agent at or before the time of  purchase.  

The cost of initial training at our corporate location of up to three people is  included in the franchise fee, but you are responsible for transportation and expenses for meals and lodging  while attending training. The total cost will vary depending on the number of people attending, how far you  travel and the type of accommodations you choose. These expenses are typically non-refundable. Before  making airline ticket, hotel, rental car or other reservations, you should inquire about the refund policy in the  event you need to cancel any reservation. We will provide up to 3 trainers for training at your location prior  to opening at a daily rate of $350 per trainer plus all travel and reasonable living expenses.

This range includes the cost of signage used in the start-up of the franchised  business. The amounts you pay for signage are typically non-refundable. Signage will depend primarily on  the location from which the franchised business is operated. You should inquire about the return and refund  policy of the suppliers at or before the time of purchase.  

You must purchase the computer hardware and  software that is specified in ITEM 11. You must have an automatic backup service for your computer  equipment and software. You are required to use our operating systems as described in the Confidential  Operations Manual. The amounts you pay for computer equipment and software are typically non  refundable, or if refundable, you may be subject to a “re-stocking” fee. You should inquire about the return  and refund policy of the supplier at or before the time of purchasing. Typically, the amounts you pay for an  automatic backup service are non-refundable. You should inquire about the refund policy of the supplier at or  before the time of purchasing.  

You must purchase and/or lease and install furniture,  fixtures and equipment necessary to operate your franchised business. The cost of the furniture, fixtures and  equipment will vary according to local market conditions, the size of the facility, suppliers and other related  factors. We do not know if the amounts you pay for furniture, fixtures or equipment are refundable. Factors  determining whether furniture, fixtures and equipment are refundable typically include the condition of the  items, level of use, length of time of possession and other variables. You should inquire about the return and  refund policy of the suppliers at or before the time of purchasing or leasing.