What factors might affect the actual costs of opening a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
our insurance policies.
Note 8: These figures are just estimates and we cannot guarantee that you will not have higher costs. Competitive conditions described in Item 1 will affect these costs. The estimate includes minimum working capital for the startup of your Business. This also includes estimates of miscellaneous startup costs such as: rent for an additional two (2) months (first months' rent is already included above), shipping and delivery costs, purchasing additional products and supplies; hiring additional staff, workman's compensation insurance payments (if applicable), additional permits and other miscellaneous costs.
Total Estimated Initial Investment. The total estimated initial investment is an estimate only of the range of startup expenses you may incur. We relied on our principals' combined experience when preparing these figures. The actual amount of funds you will need depends on a variety of factors, including the size of your facility, the location of your Business, build-out expenses (for example if you choose to install a gas deep fryer and a hood), the time of year when you open your Business, the amount of kitchen equipment, products and supplies you purchase, how many employees you hire, implementation of a marketing plan, your own management skill, economic conditions, competition in your area and other factors. The estimate of initial investment funds is based on an owner-operated business; or incorporating business operations within an existing complimentary business and does not include salaries or benefits for full-time employees.
These figures are just estimates and we cannot guarantee that you will not have higher costs. Competitive conditions described in Item 1 will affect these costs. These costs do not include your Royalties and System Advertising fees which begin immediately once your Business is open for operation. These costs should be included
in your projections of overall operations costs beginning with your first month of operation. We acknowledge that you may choose to invest additional funds into your Business during the first three (3) months of operation, and sometimes longer, but we cannot estimate or promise when, or whether, any franchisee will achieve positive cash flow or profits You should review the figures carefully with a business advisor and identify your individual expenses along with cash flow projections before making any decision to buy a franchise.
We do not offer financing, directly or indirectly, for any part of the initial investment for a Franchise. The availability and terms of third-party financing will depend on factors such as the availability of financing generally, your creditworthiness, collateral you may have, and the lending policies of financial institutions. The estimate does not include any finance charges, interest, or debt service obligation, or your living expenses. You should have sufficient capital or other means to pay for your living expenses for at least six months of operation.
ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
We may offer or designate others to offer certain products, supplies, kitchen equipment or services and we may become approved suppliers or the only approved supplier(s) for these and other products, supplies, kitchen equipment and services. The products, supplies, kitchen equipment and services include: ingredients ( for any proprietary product we may have,, etc.), fresh produce, dairy products; beverage products (such as: tea, carbonated drinks, juices and specialty beverages), supplies (such as small wares, disposables, packaging materials, disposables and cooking supplies), kitchen equipment (such as: refrigerators, freezers, etc. as described in Item 7), furnishing and fixtures, technology items (such as computers and POS system) software, printed menus, signage, uniforms, professional laundry services, merchant services, printed advertising materials. You cannot purchase unapproved products or supplies and/or lease or purchase unapproved kitchen equipment from any vendor and/or supplier that are not on our pre-approved list without written permission. We will provide you with: a written list of approved products, supplies, kitchen equipment and services you can use and offer in your Business; recommended procedures and strategies when purchasing products and supplies and leasing or purchasing kitchen equipment for your Business; and a written list of approved vendors and/or suppliers to purchase and/or lease kitchen equipment, products, supplies and services from during our initial training program. If we develop proprietary products or if we develop proprietary equipment or software in the future, you must purchase such items from us, our affiliates or approved suppliers. We may become the approved suppliers or the only approved supplier for products, supplies, kitchen equipment and services in the future. There are no supply contracts at this time. None of our officers or directors owns any interest in any vendor or supplier other than us.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT (FDD pages 16–21)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, several factors can influence the actual costs of opening a franchise. These include the size and location of the facility, with a typical business located in a shopping center, mall, or free-standing building. Real estate costs are dependent on location, size, visibility, economic conditions, accessibility, and competitive market conditions. The cost per square foot is estimated to be approximately $3 on the low end and approximately $5 on the high end, not including common area maintenance fees. Build-out expenses, such as installing a gas deep fryer and hood, also play a significant role. The document advises finding a space needing minimal leasehold improvements, but also notes that interior alterations are typically necessary. The condition of the property and the extent of required alterations can significantly impact these costs.
The amount of kitchen equipment, products, and supplies purchased, as well as the number of employees hired, will also affect the initial investment. The cost of kitchen equipment, furniture, and fixtures can vary based on the square footage of the facility. For example, the low end of the estimate for these items is based on a 1,350 sq. foot facility, while the high end is based on a 2,800 sq. foot facility. Sales tax, which may range from 3% to 10% of the purchase price, is not included in the estimates. Franchisees must also consider the implementation of a marketing plan and their own management skills, as well as broader economic conditions and competition in their area.
Furthermore, the availability and terms of third-party financing can impact costs, though Burros Fries does not offer direct or indirect financing. The document emphasizes that the total estimated initial investment is only an estimate, and actual costs may be higher. Competitive conditions, as described in Item 1 of the FDD, can also affect these costs. The estimate is based on an owner-operated business or incorporating business operations within an existing complimentary business and does not include salaries or benefits for full-time employees. Franchisees are encouraged to review these figures with a business advisor and identify their individual expenses and cash flow projections before making a decision to buy a franchise.