Does Burros Fries provide tenant improvement allowances for build-out expenses?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
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. Architect and permitting costs are not included in this estimate. Whether or not any leasehold improvements or build-out expenses are refundable depends on the terms and conditions of your contracts you're your contractors, as well as your lease agreement (Franchise Agreement Sections 12.S and 12.T).
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 provide connections to adequate
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, whether a landlord provides tenant improvement allowances is subject to the lease agreement. The document states that a typical Burros Fries business is located in a shopping center, mall, or free-standing building, with costs estimated between $3 and $5 per square foot, excluding common area maintenance fees. These real estate costs are dependent on factors such as location, size, visibility, and economic conditions.
The FDD advises franchisees to find a space needing minimal leasehold improvements or fixtures. However, in most cases, franchisees will need to alter the interior of their business before opening. The costs for this can vary widely depending on the condition of the property and the extent of alterations required. The high estimate reflects the potential need to construct a drive-through facility, which Burros Fries highly recommends. The franchisee is responsible for hiring an architect to create a complete set of drawings based on the size of their facility and local permitting requirements, with architect and permitting costs not included in the initial investment estimate.
Prospective Burros Fries franchisees should carefully review lease terms and negotiate tenant improvement allowances with the landlord to potentially offset build-out expenses. Understanding these costs and potential allowances is crucial for accurately estimating the total initial investment and managing cash flow during the startup phase. Franchisees should also consider the potential benefits of a drive-through facility, despite the additional construction costs, as it is considered an important aspect of sales.