What factors affect the cost of leasehold improvements for a Cream franchise?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The cost of leasehold improvements will vary depending on many factors, including: (i) the size and configuration of the Premises; (ii) pre-construction costs (including demolition of existing walls and removal of existing improvements and fixtures); and (iii) cost of materials and labor, which may vary based on geography and location or whether you must use union labor for the build-out of your Shop.
These amounts may depend on local conditions, including the availability and prices of labor and materials.
These costs may also vary depending on whether certain of these costs will be incurred by the landlord or through landlord-tenant improvement contributions, and the condition of the space before you take possession of the Premises.
The low end of our estimate assumes that you have leased space that requires fewer improvements to convert the Premises to a Jeni's Ice Creams Scoop Shop and that you are leasing approximately 900 square feet of retail space.
The high end of our estimate assumes that you have leased a blank space, including that more improvements are required and that you are leasing approximately 1,400 square feet of retail space.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the cost of leasehold improvements is affected by several factors. These include the size and configuration of the premises, pre-construction costs such as demolition and removal of existing fixtures, and the cost of materials and labor. The cost of materials and labor can fluctuate based on geography, location, and whether union labor is required for the build-out.
Local conditions, including the availability and prices of labor and materials, also play a role in determining these costs. Furthermore, the allocation of costs between the landlord and tenant through improvement contributions, as well as the initial condition of the space, can significantly impact the overall expense. Cream estimates that the low end assumes a space of approximately 900 square feet requiring fewer improvements, while the high end assumes a blank space of approximately 1,400 square feet needing more extensive work.
For 18 affiliate-owned Cream shops opened or renovated between 2023 and 2024, the average leasehold improvement cost was $563,226, with a range from $327,536 to $1,149,331. These locations averaged 1,220 square feet, ranging from 552 to 1,948 square feet. The average tenant allowance from the landlord was $67,513, with a range from $0 to $113,027. Cream also requires franchisees to use their designated architect and may require the use of their project manager if the franchisee lacks experience in retail construction management. A permit expeditor is also required to accelerate the opening date.