What should a prospective Burros Fries franchisee include in their projections of overall operations costs?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
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 should include royalties and system advertising fees in their projections of overall operation costs, starting from the first month of operation. These costs are in addition to the initial investment expenses. The FDD acknowledges that franchisees may need to invest additional funds into the business during the first three months, or even longer, but Burros Fries cannot guarantee when or if a franchisee will achieve positive cash flow or profits.
Prospective Burros Fries franchisees should carefully review all figures with a business advisor and identify all individual expenses along with cash flow projections before deciding to buy a franchise. This includes understanding the competitive conditions in their area, as these can affect costs. The initial investment 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.
Ultimately, Burros Fries advises that the figures provided are estimates, and there is no guarantee that actual costs will not be higher. Franchisees need to conduct thorough due diligence and seek professional advice to develop realistic financial projections for their specific circumstances.