What expenses are included in the additional funds estimate for the first 3 months of operation of an Aw franchise?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Additional Funds. This item estimates your expenses for the first 3 months of operation. It includes payroll costs (but not a draw for you), utilities, inventory purchases and other operating costs, and royalty and marketing fund payments to us. We have not included any amount in the estimates for a vehicle since delivery drivers use their own vehicles.
These figures are estimates and we cannot guarantee that you will not have additional expenses in the initial operation of your Papa Ray's Pizza Restaurant. Your costs will depend on factors such as how closely you follow our methods and procedures, your management skill, experience and business sense, local economic conditions, the local market for your products and services, competition, and the sales level reached during the initial period of operations.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–19)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the additional funds estimate covers expenses during the first three months of operation. These include payroll costs (excluding any draw for the franchisee), utilities, inventory purchases, other operating costs, and royalty and marketing fund payments to Aw. The FDD specifies that the estimate does not include any amount for a vehicle, as delivery drivers are expected to use their own vehicles. The estimated range for these additional funds is between $40,000 and $80,000. These funds are paid as incurred, and the franchisee determines the specific allocation.
It is important to note that these figures are only estimates, and Aw cannot guarantee that franchisees will not incur additional expenses. Actual costs can vary based on factors such as adherence to Aw's methods and procedures, the franchisee's management skills, local economic conditions, the local market for Aw's products and services, competition, and the sales level achieved during the initial operating period.
Prospective franchisees should carefully consider these factors and create a detailed financial plan to ensure they have sufficient capital to cover all potential expenses during the initial three months of operation. Consulting with a business advisor to review these estimates and tailor them to the specific location and circumstances is highly recommended. Understanding the potential variability in these costs is crucial for the financial stability of a new Aw franchise.