What is the range of monthly rent costs for unimproved property for a Carls franchise?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
chised Restaurants, which is usually four days before opening and a minimum of seven days after opening, for a total of up to two weeks. The amount of the Initial Franchise Fee and Opening Training Support Fee and the manner in which those fees are paid are explained in detail in Item 5.
- (4) We expect that you will buy or lease unimproved property and construct the Franchised Restaurant. Typically, 22,000 to 44,000 square feet of land is needed for the Franchised Restaurant and adjacent parking facilities. Local building codes may require that the Franchised Restaurant be placed on a larger lot. The cost of commercial land, whether you lease or buy, may vary considerably depending upon the location and conditions affecting the market for commercial property. The purchase of unimproved property of the size required may range from $650,000 to $1,100,000 or more. The rent for unimproved property may range from $4,000 to $15,000 or more per month or approximately 10% per year of the fair market or agreed upon land value. You may be required to pay the first and last months' lease payment upon signing your lease agreement.
Lease payments made by you to third party lessors ma
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 31–36)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the rent for unimproved property may range from $4,000 to $15,000 or more per month. The FDD notes that this could also be approximately 10% per year of the fair market or agreed-upon land value. Franchisees may be required to pay the first and last months' lease payment upon signing their lease agreement.
Carls expects franchisees to either buy or lease unimproved property and construct the restaurant. The document states that typically 22,000 to 44,000 square feet of land is needed for the restaurant and adjacent parking facilities. However, local building codes may require a larger lot. The cost of commercial land, whether leased or purchased, can vary significantly based on location and market conditions.
Lease payments to third-party lessors can also vary greatly depending on the property size, type of transaction, and location. Lease agreements may include expenses such as taxes, insurance, maintenance, fixed rent (with escalations), percentage rent, and other charges related to the operation of the Carls restaurant. Prospective franchisees should carefully consider these potential costs and consult with a business advisor before making a decision to purchase a franchise.