Does the estimated initial phase expense for Azal Coffee include an owner's salary or draw?

According to Azal Coffee's 2024 Franchise Disclosure Document, the estimated initial phase expenses do not include an owner's salary or draw. Item 7 clarifies that the additional funds, estimated between $20,000 and $40,000, cover expenses incurred during the initial three-month phase of the store's operation. These expenses encompass advertising, royalties, mystery shopper fees, utilities, insurance, payroll, and inventory. However, the estimate does not include cash requirements to cover operating losses or an owner's salary or draw after this initial phase.

This means that prospective Azal Coffee franchisees should not rely on the estimated initial investment to cover their personal income or any operating deficits beyond the first three months. Franchisees must secure additional funds to cover these costs. Azal Coffee recommends having at least 50% of the estimated initial investment in equity and financing no more than 50% with debt.

Azal Coffee explicitly states that these figures are estimates and provides no guarantee that franchisees will not incur additional expenses. The actual costs during the initial phase will vary based on factors such as adherence to procedures, management skills, local economic conditions, market demand, competition, and sales levels. Therefore, it is crucial for potential franchisees to develop a detailed business plan and financial projections with the help of an experienced accountant or financial advisor to accurately assess their financial needs beyond the initial investment estimates provided by Azal Coffee.