For a Carls franchise, what is the estimated range for building costs?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Expenditure | Low Amount | High Amount | Method of Payment (2) | When Due | To Whom Payment Is To Be Made |
|---|---|---|---|---|---|
| Fees to CJR: | |||||
| Initial Franchise Fee (3) | $25,000 | $25,000 | Lump sum | See Item 5 | CJR |
| Opening Training Support | $30,000 | $74,000 | As incurred | See Item 5 | Vendors, CJR |
| Team Fee (3) | |||||
| Total Fees to CJR | $55,000 | $99,000 | |||
| Build-Out Costs: | |||||
| Real Property (4) | Variable | ||||
| Building (5) | $577,500 | $808,935 | Progress payments | As arranged | Contractor |
| Site Improvements (6) | $110,000 | $605,000 | Progress Payments | As arranged | Contractor |
| Soft Costs (7) | $55,000 | $236,500 | As arranged | As required | Architect, City/County Utilities, etc. |
| Equipment (8) | $385,000 | $594,000 | As arranged | As incurred | Vendors |
| Signage (9) | $55,000 | $104,500 | As arranged | As incurred | Vendors |
| Point of Sale System (8) | $60,500 | $79,200 | As arranged | As incurred | Vendors, CJ |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 31–36)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the estimated initial investment for building costs ranges from $577,500 to $808,935. This figure is specifically for the building itself and includes HVAC installation. However, it does not account for the additional cost of adding a cash window to a single or double drive-through lane, which could add between $65,000 and $115,000 to the overall cost. These costs are typically paid in progress payments to the contractor as arranged.
Site improvements, which are separate from the building costs, range from $110,000 to $605,000. These improvements cover all the necessary work to prepare the site, including fill and compaction, curb cuts, parking lot construction, sidewalks, drive-thru lanes, landscaping, irrigation, site electrical work, lighting, grease interceptor installation, and utility runs. Additionally, franchisees should consider soft costs, which range from $55,000 to $236,500, covering expenses for architects, city/county utilities, and other related services.
Prospective Carls franchisees should also be aware of potential off-site costs, such as intersection improvements or street widening, which can significantly impact the overall investment. It is crucial to consult with relevant regulatory agencies to identify all required building permits, impact fees, taxes, bonds, licenses, and other fees, as these can vary substantially depending on the location. The total build-out costs, including equipment and signage, can range from $1,243,000 to $2,744,500. Therefore, franchisees need to conduct thorough due diligence and factor in all potential costs to accurately assess the financial requirements for establishing a Carls franchise.