What is included in the leasehold improvements category for an Azal Coffee franchise?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
e of those costs.
- (4) This category will include mechanical installations (e.g., HVAC), leasehold improvements (e.g. walls and counters, wall and floor coverings, ceilings, lighting, electrical and plumbing) as well as the cost of a qualified architect to prepare a site plan and construction drawings for the Franchise Location. This category also includes fees you may be required to pay to us for site inspections if you request and we approve your use of a general contractor other than the general contractor designated by us. The costs of these items may vary considerably depending on the size, physical condition and location of the premises and the amount of the costs, if any, a landlord may be willing to assume (however, if the landlord assumes costs, you will probably pay a higher rent for the location and you may have to personally guaranty the lease payments for a period of time to allow the landlord to amortize its costs). The estimated cost assumes the landlord will provide you with a "white box," including utility hookups, etc. or will directly pay or reimburse you for a portion of the expenses. If the landlord does not provide a "white box" or pay or reimburse you for a portion of the expenses, you may have to incur substantial additional expenses for leasehold improvements. The estimated range does not include fees and costs relating to obtaining building and other permits and licenses.
- (5) This category includes store equipment, furniture, and fixtures. These costs will vary depending on the size of the Franchise Location.
- (6) The price for signage will vary depending on the type of site and local ordinances for outdoor and indoor signage.
- (7) The range in the table is an estimated range for 2 trainees, you and your General Manager, to attend our initial training program. Although we do not charge any additional fees for the initial training program, you are responsible for paying any wages due to your employees as well as travel, food and lodging expenses incurred by you and your employees during initial training. These costs will depend on the distance you and your employees must travel and the type of accommodations you choose.
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 leasehold improvements category encompasses several essential components for setting up a franchise location. These include mechanical installations such as HVAC systems, and the construction of walls and counters. The category also covers the costs for wall and floor coverings, ceilings, lighting, and electrical and plumbing work. Additionally, the cost of hiring a qualified architect to prepare a site plan and construction drawings for the franchise location is included in this category.
The FDD indicates that the costs for these improvements can vary significantly based on the size, physical condition, and location of the premises. The amount a landlord is willing to contribute can also affect these costs; if the landlord covers some expenses, the franchisee will likely pay higher rent and may need to personally guarantee lease payments. The estimated initial investment assumes the landlord provides a "white box" space with utility hookups or reimburses a portion of the expenses. If the landlord does not provide a "white box" or offer reimbursement, the franchisee may incur substantial additional expenses for leasehold improvements.
The estimated initial investment for leasehold improvements ranges from $120,000 to $190,000, payable to contractors and suppliers before opening the Azal Coffee store. This figure does not include fees and costs related to obtaining building and other permits and licenses. Prospective franchisees should carefully consider these potential variations and additional costs when planning their initial investment.