What does the high end of the leasehold improvement estimate for Baya Bar assume about the leased space?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- Leasehold Improvements. The cost of leasehold improvements will vary depending on many factors, including: (a) the size and configuration of the premises; (b) pre-construction costs (including demolition of existing walls and removal of existing improvements and fixtures); and (c) cost of materials and labor, which may vary based on geography and location or whether you must use union labor for the build-out of your location. These figures are our principals' best estimate based on remodeling/finish-out rates in the metropolitan New York area. These amounts may vary substantially based on local conditions, including the availability and prices of labor and materials. These costs may also vary depending on whether certain of these costs will be incurred by the landlord or through landlord tenant improvement contributions, and the condition of the space before you take possession of the premises. The low end of our estimate assumes that you have leased space that previously operated as a restaurant and that you will convert to a Baya Bar Shop. The high end of our estimate assumes that you have leased a "vanilla box" space and that more improvements are required. Our estimate does not include any tenant improvement allowance that you may negotiate.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–20)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the high end of the leasehold improvements estimate, which ranges from $34,750 to $118,760, assumes the franchisee is leasing a "vanilla box" space. This means the space requires more extensive improvements to convert it into a Baya Bar shop.
In practical terms, a "vanilla box" typically refers to a commercial space that is delivered with minimal finishes. It usually includes basic utilities, concrete floors, unfinished walls, and a basic ceiling. Therefore, a Baya Bar franchisee leasing a vanilla box should anticipate significant construction and build-out costs to meet Baya Bar's specifications. These costs cover everything from demolition to the installation of fixtures and finishes.
Conversely, the low end of the leasehold improvement estimate assumes the franchisee has leased a space that previously operated as a restaurant. This would mean that some of the necessary infrastructure, such as plumbing and electrical systems, may already be in place, reducing the overall cost of improvements. It is important to note that these estimates do not include any tenant improvement allowance that a franchisee may negotiate with the landlord, which could potentially offset some of these expenses.