Does Burros Fries expect franchisees to purchase real property for their business location?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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Note 3: A typical Business is in a shopping center, mall or a free-standing building. Cost per square foot will depend on your geographic area and we estimate such costs to be approximately $3 per square foot on the low end and approximately $5 per square foot on the high end. These sums do not include common area maintenance fees, which if applicable, will vary depending on your location or any sums for the purchase of real property, as we do not expect that you will buy real property. Real estate costs depend on location, size, visibility, economic conditions, accessibility and competitive market conditions. You may be able to reduce this expense if you are able to occupy a space in an existing location that compliments another business. The space must be enclosed and separate from other businesses with its own locking door. In the event you leave your leased premises before the termination of your lease, you may owe the landlord payment for the entire lease term depending on the terms and c
Source: Item 7 — ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT (FDD pages 16–21)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, franchisees are not expected to purchase real property for their business location. The FDD states that the initial investment costs do not include sums for the purchase of real property. Instead, Burros Fries anticipates that franchisees will lease a location in a shopping center, mall, or a free-standing building.
The cost per square foot for leasing is estimated to be between $3 and $5, but this does not include common area maintenance fees. The actual real estate costs will vary depending on factors such as location, size, visibility, economic conditions, accessibility, and competitive market conditions. The document advises franchisees to find a space needing minimal leasehold improvements or fixtures to keep costs down.
While purchasing real estate is not the standard expectation, franchisees should still carefully consider location and lease terms. The FDD notes that if a franchisee leaves the leased premises before the termination of the lease, they may owe the landlord payment for the entire lease term, depending on the lease's specific terms and conditions. Therefore, securing favorable lease terms is crucial for managing potential financial risks.