For a Single Restaurant
Type of Expenditure
Method of Payment
To whom payment is to be made
|Initial Franchise Fee||$25,000||Cash Payment||Upon Execution of Agreement||Franchisor|
|Initial Training and Opening Fee||$5,000||Cash Payment||2 weeks prior to start of training program||Franchisor|
|Initial Advertising||$1,000 – $5,000
|Cash Payment||Prior to Opening||Franchisor|
|Leasehold Improvements||$40,000 – $165,000
|Progress Payment||Prior to Opening||General Contractors and Suppliers|
|Security Deposits, Utility Deposits, Business Licenses and other prepaid expenses||$3,000 – $9,000
|Cash Payment||Prior to Opening||Landlord, Utilities, Governmental Agencies|
|Fixtures and Equipment||$60,000 – $80,000
|Cash Payment||Prior to Opening||Suppliers|
|Point of Sale Equipment||$13,000 – $15,000
(Notes 2, 5)
|Cash Payment||Prior to Opening||Suppliers|
|Initial Inventory and Supplies||$8,000 – $13,000
|As Incurred||Prior to Opening||Suppliers|
|Training (Meals and Lodging)||$5,000 – $10,000||As Incurred||As Incurred||Vendors|
|Insurance||$1,000 – $5,000
|Cash Installment||Monthly||Insurance Company|
|Additional Funds – 3 Months||$30,000 – $70,000
|As Incurred||As Incurred||Vendors, Suppliers, Employees, etc.|
|Totals||$182,000 – $402,000
- A Franchisee will have to lease an appropriate site to operate a PLANET SUB Restaurant. Generally the leases extend for a period of 10 years with one or more five-year options to renew. The amounts specified for leasehold improvements, security deposit/first months rent, permits and architects fees and fixtures and equipment are based on estimates. These costs may vary depending on the size, condition and location of the leased premises, the landlord’s contribution to leasehold improvements, if any, supply and demand for materials and labor in the local area, local building and fire code requirements and requirements of the lease regarding such matters as construction, signage and inflation. Most leasing agents determine monthly rental by the value of the property x 10% divided by 12 plus taxes and insurance
- (triple net lease). If you choose to purchase or construct your own building, your initial costs will be higher. Newly constructed Restaurants will vary in size from 1,500 to 2,500 square feet. The above assumes you will lease your property.
- You must purchase menus and certain point of sale advertising and promotion materials from us or from a supplier approved by us. Except for these items, you may purchase or lease original equipment and supplies, signs and opening inventory meeting our standards and specifications from any source approved by us, subject to our rights to be the sole source of supply or sole designation of suppliers as described in Item 8.
- The cost of insurance may be significantly higher than the estimate depending on such factors as particular state coverage requirements, store location and your loss history. Workers Compensation insurance, owned auto insurance and delivery insurance are not included in the above estimate.
- We recommend that you have additional funds available for miscellaneous initial start-up expenses for the first 3 months of operation. These expenses include payroll costs, deposits for installation of telephones, deposits for gas, electricity and related items, costs for initial point of sale advertising and promotion materials, and initial working capital. These are paid as incurred to various utilities, suppliers, employees
- (not including you) and, with respect to point of sale advertising and promotion materials, to us. These figures are only estimates and we cannot assure you that you will not have additional expenses starting the business. Your actual costs will vary according to your approach to the business; your management skills, experience and business acumen; local economic conditions; the prevailing wage rate in your market; competition; and the growth of your business.
- The lower limit reflects the initial fees required to lease the point of sale equipment. The higher limit applies if you purchase the point of sale equipment.
- These figures do not include the applicant’s fee of $10,000
- (see Item 5). We relied on the experience of our affiliates and franchisees who provided projected or actual costs of Restaurants to compile this estimate. You should review these figures carefully with your business advisor before making a decision to acquire a franchise.
No allowance has been made in the chart referred to in the above for the costs of implementing an off-site delivery program pursuant to the terms of a delivery agreement. The need for this outlay will depend on whether a Franchisee elects to offer such off-site delivery services. If so, the additional costs required to implement off-site delivery services will vary depending on such factors as whether you elect to purchase or lease a delivery vehicle, and whether additional telephones, ovens and other capital items will be required to accommodate anticipated larger volumes.
As discussed in Item 10, we do not offer, either directly or indirectly, financing to Franchisees for any items. However, the initial investment may be financed in part through a financial institution or directly from suppliers of specific items. Financing availability and terms will vary with the availability of financing generally, your creditworthiness, loan security available from you, lenders’ policies regarding financing the type of business for which financing is sought and similar considerations.
We have relied on our experience and the experience of our affiliates in the sandwich restaurant business since 1998 to compile these estimates.