What does the Alloy estimate assume regarding cooling, water, and heating infrastructure?

According to Alloy's 2025 Franchise Disclosure Document, the estimated initial investment for a new franchise location assumes that the landlord will provide adequate cooling, water, and heating infrastructure. This is a significant assumption because if the existing infrastructure is inadequate, the franchisee will incur additional costs to upgrade or replace it. The estimate also includes some materials such as paint, trim, plumbing, electrical and flooring, labor costs and installation of certain features, including flooring and lighting.

It is important for prospective Alloy franchisees to verify the condition of the cooling, water, and heating infrastructure at potential locations before signing a lease. If the landlord does not provide adequate infrastructure, the franchisee will need to negotiate a tenant improvement allowance or credit to cover the costs of upgrades. These tenant improvement credits ranged from $0 to $188,000 for franchisees during 2024. Franchisees should also factor in potential variations in costs due to location, size, and condition of the facility.

This assumption regarding existing infrastructure is fairly standard in the franchise industry, particularly for businesses that lease their premises. However, franchisees should always conduct thorough due diligence to ensure that the assumptions underlying the franchisor's estimates are valid for their specific circumstances. Failure to do so can result in unexpected costs and delays in opening the franchise.