What is the estimated total initial investment range to open an Azal Coffee franchise?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
NITIAL INVESTMENT
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|
| Initial Franchise Fee | $25,000 (1) | Lump sum | On signing the Franchise Agreement | Us |
| Lease Review | $0.00 to $1,500 | As incurred | Before opening as incurred | Us |
| Fee | ||||
| Grand Opening Advertising (2) | $3,000 to $6,000 | As incurred | As incurred | Advertising Providers |
| Initial Lease | $9,000 to $20,000 | As agreed | As specified in lease | Landlord |
| Payments (3) | ||||
| Leasehold | $120,000 to | As agreed | Before opening as incurred | Contractors and Suppliers |
| Improvements (4) | $190,000 | |||
| Equipment, Fixtures, and Furniture (5) | $50,000 to $70,000 | As agreed | Before opening as incurred | Suppliers |
| Computer | $4,000 to $6,000 | As incurred | Before opening as incurred | Us and Suppliers |
| Technology and | ||||
| POS System | ||||
| Signage | $5,000 to $10,000 | As agreed | Before opening as incurred | Suppliers |
| (Indoor/Outdoor) | ||||
| Initial Inventory and Operating Supplies | $25,000 to $35,000 | As agreed | Before opening as incurred | Our affiliate and Suppliers |
| Miscellaneous | $2,000 to $4,000 | As agreed | Before opening as incurred | Third Parties |
| Travel and Living | ||||
| Expenses while | ||||
| Training (7) | ||||
| Insurance (8) | $2,500 to $5,000 | As agreed | Before opening as incurred | Insurance Companies |
| Professional Services, Business Licenses and Miscellaneous Expenses (9) | $5,000 to $7,500 | As agreed | Before opening as incurred | Professionals, Governmental Organizations, and other Third Parties |
| Additional Funds (three months) | $20,000 to $40,000 | As incurred | As incurred | Us, our affiliates, Suppliers and Employees |
| TOTALS(11) | $270,500 t |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 19–22)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, the estimated total initial investment to open an Azal Coffee franchise ranges from $270,500 to $420,000. This investment covers various expenses before the store opens and includes additional costs during the first three months of operation. However, it excludes ongoing operating losses or the owner's salary after this initial phase. Azal Coffee recommends having at least 50% of the initial investment in equity and financing no more than 50% with debt. The company does not offer any financing options. Prospective franchisees should consult with an experienced accountant or financial advisor to develop a detailed business plan and financial projections.
The initial investment encompasses several categories. This includes an initial franchise fee of $25,000, grand opening advertising expenses ranging from $3,000 to $6,000, and initial lease payments estimated between $9,000 and $20,000. Leasehold improvements are a significant cost, estimated between $120,000 and $190,000. Additionally, franchisees must budget for equipment, fixtures, and furniture, which range from $50,000 to $70,000, as well as computer technology and POS systems, costing between $4,000 and $6,000. Signage expenses range from $5,000 to $10,000, and initial inventory and operating supplies are estimated at $25,000 to $35,000.
Other costs include miscellaneous expenses ranging from $2,000 to $4,000, insurance costs between $2,500 and $5,000, and professional services and business licenses estimated at $5,000 to $7,500. A lease review fee could cost up to $1,500. Furthermore, Azal Coffee estimates additional funds needed for the first three months of operation to be between $20,000 and $40,000. These additional funds cover advertising, royalties, mystery shopper fees, utilities, insurance, payroll, and additional inventory.
Several factors can influence the total initial investment. These include the location and condition of the premises, the extent of leasehold improvements required, and local market conditions. The FDD notes that costs could be significantly higher if the franchisee purchases real estate. The estimates assume the landlord provides a "white box" with utility hookups; otherwise, leasehold improvement costs could increase substantially. Franchisees should carefully consider these variables and conduct thorough due diligence to accurately estimate their initial investment.