What factors affect the real estate costs for a Burros Fries 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 conditions of your lease.
Note 4: We advise you to find a space needing minimal leasehold improvements or fixtures. In most cases you will need to alter the interior of your Business before you open for operation. The costs will vary widely and may be significantly higher than what is projected in the table above depending on factors such as the condition of the property and the extent of alterations required for the property. The high estimate reflects the potential need to construct a drive-through facility. We highly recommend you make use of a drive-through as part of your facilities, as it is an important aspect of your sales. In addition, we assume that your landlord will provi
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 real estate costs. The FDD notes that a typical Burros Fries business is located in a shopping center, mall, or a free-standing building. The estimated cost per square foot ranges from $3 on the low end to $5 on the high end, but these figures do not include common area maintenance fees.
Location is a primary driver of real estate expenses for Burros Fries. Other factors include the size of the premises, its visibility, prevailing economic conditions, accessibility, and the competitive landscape of the market. The document suggests that franchisees may be able to lower real estate costs by occupying a space that complements another existing business, provided the space is enclosed, separate, and has its own locking door.
Lease terms can also significantly impact costs. If a Burros Fries franchisee vacates the premises before the lease expires, they may be liable for the entire remaining lease term, depending on the specific terms and conditions outlined in the lease agreement. Additionally, the FDD advises franchisees to seek spaces requiring minimal leasehold improvements to keep costs down. The need for extensive alterations, especially constructing a drive-through facility, can substantially increase expenses. The availability of connections to essential services like electrical, gas, water, and sewage, as well as potential tenant improvement allowances from the landlord, can also affect the overall real estate investment.
Prospective Burros Fries franchisees should carefully consider these factors and conduct thorough due diligence in their target market to accurately estimate real estate costs. Consulting with a business advisor to review these figures and develop cash flow projections is highly recommended before making a final decision.