What is included in the high estimate for leasehold improvements for a Burros Fries location?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
nditions 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 provide connections to adequate
electrical, gas, water and sewage service and your landlord may provide tenant improvement allowances. We base our estimates on the costs that our affiliates incurred when building out their locations. You should investigate all these costs in the area in which you wish to establish a Burros & Fries Business. We will provide you with standard layouts and design options for your Business; however, it is your responsibility to hire an architect to create a complete set of drawings based on the size of your facility and local permitting requirements.
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, the high estimate for leasehold improvements is $450,000. The document indicates that this higher estimate accounts for the potential construction of a drive-through facility. Burros Fries "highly recommend[s]" that franchisees include a drive-through as part of their facilities, as it is considered an important aspect of sales.
It is important to note that the cost per square foot for a typical Burros Fries location, whether in a shopping center, mall, or free-standing building, is estimated to be approximately $3 per square foot on the low end and approximately $5 per square foot on the high end. These figures do not include common area maintenance fees or sums for purchasing real property. The document advises finding a space needing minimal leasehold improvements or fixtures, but acknowledges that interior alterations are typically necessary before opening.
Furthermore, the inclusion of a drive-through facility is described as an optional addition to the restaurant, with an estimated expenditure between $10,000 (low) and $20,000 (high). These costs are not included in the total estimated initial investment figures provided in the table. If a franchisee anticipates including a drive-through, they should add these amounts to the total estimated investment, potentially increasing the high end to $913,000.
Prospective franchisees should carefully consider the potential benefits of a drive-through, as well as the associated costs, when evaluating potential locations and negotiating lease terms. They should also consult with an architect to create a complete set of drawings based on the size of their facility and local permitting requirements, as these costs are not included in the initial estimates.