What is the estimated total initial investment range for a first Desi District franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
ENT
EATERY ONLY
| Type of expenditure | Amount | | Method of payment | When due | To whom payment is to be made | |-------------------------------------------------|-------------|-----------|-----------------------------|--------------------------------------|-------------------------------| | Initial franchise fee (see | $30,000 - | $30,000 | Check or wire transfer | Upon signing the franchise agreement | Us | | Note 1) | | | | | | | Rent and Lease Security | $5,000 - | $30,000 | Check | Upon signing lease | Landlord | | Deposit (see Note 2) | | | | | | | Utilities (see Note 3) | $1,000 - | $5,000 | Check, debit, and/or credit | Upon ordering service | Utility providers | | Leasehold | $390,000 - | $520,000 | Check | As incurred or when billed | Contractors | | Improvements (see Note | | | | | | | 4) | | | | | | | Market Introduction | $5,000 - | $10,000 | Check, debit, and/or credit | As incurred or when billed | Vendors and suppliers | | Program (see Note 5) | | | | | | | Furniture, Fixtures, and Equipment (see Note 6) | $120,000 - | $240,000 | Check, debit, and/or credit | As incurred | Vendors and suppliers | | Computer Systems (see Note 7) | $7,000 - | $12,000 | Check, debit, and/or credit | As incurred | Vendors and suppliers | | Insurance (see Note 8) | $2,000 - | $8,000 | Check | Upon ordering | Insurance company | | Signage (see Note 9) | $8,000 - | $12,000 | Check, debit, and/or credit | Upon ordering | Vendor |
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made |
|---|---|---|---|---|
| Office Expenses (see | $500 - $1,000 | Check, debit, and/or credit | As incurred | Vendors |
| Note 10) | ||||
| Inventory (see Note 11) | $20,000 - $40,000 | Check, debit, and/or credit | Upon ordering | Our Affiliate, Vendors |
| Licenses and Permits (see Note 12) | $1,000 - $2,000 | Check | Upon application | Government |
| Dues and Subscriptions (see Note 13) | $200 - $500 | Check, debit, and/or credit | As incurred | Vendors, trade organizations |
| Professional Fees | $1,500 - $4,000 | Check, debit, and/or credit | As incurred or when billed | Professional service firms |
| (lawyer, accountant, | ||||
| etc.) (see Note 14) | ||||
| Travel, lodging and | $3,000 - $6,000 | Cash, debit or credit | As incurred | Airlines, hotels, and restaurants |
| meals for initial training | ||||
| (see Note 15) | ||||
| Additional funds (for first 3 months) (see Note 16) | $75,000 - $100,000 | Varies | Varies | Employees, suppliers, utilities |
| Total | $669,200 - $1,020,500 | This is the total estimated initial investment to open and commence operating your initial location for the first three months (as described more fully in Chart A of this Item 7). See Note 3. |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the estimated total initial investment to open and commence operating your initial location for the first three months ranges from $669,200 to $1,020,500. This investment covers various expenses, including the initial franchise fee, rent and lease security deposit, utilities, leasehold improvements, market introduction program, furniture, fixtures, and equipment, computer systems, insurance, signage, office expenses, inventory, licenses and permits, dues and subscriptions, professional fees, travel, lodging and meals for initial training, and additional funds for the first 3 months.
The initial franchise fee ranges from $30,000 to $30,000, and is payable upon signing the franchise agreement. Rent and lease security deposits range from $5,000 to $30,000, and are due upon signing the lease. Leasehold improvements, which are the costs of construction to build out the unit, range from $390,000 to $520,000. The Market Introduction Program, covering advertising and promotion for the new store opening, ranges from $5,000 to $10,000. Furniture, fixtures, and equipment range from $120,000 to $240,000, while computer systems range from $7,000 to $12,000.
Other costs include insurance, ranging from $2,000 to $8,000, and signage, ranging from $8,000 to $12,000. Inventory costs range from $20,000 to $40,000, with purchases made through Desi District's affiliate, TAR Distributors, Inc., and other vendors. Licenses and permits range from $1,000 to $2,000, while dues and subscriptions range from $200 to $500. Professional fees range from $1,500 to $4,000. Travel, lodging, and meals for initial training range from $3,000 to $6,000. Additional funds for the first three months of operation range from $75,000 to $100,000.
Prospective franchisees should note that these costs can vary significantly based on factors such as the franchise model chosen (Eatery or Eatery and Market), location, and specific market conditions. The FDD notes that the lower end of the investment range generally accounts for the Eatery model, while the higher end accounts for the Eatery and Market model. Franchisees should carefully review all components of the initial investment and consider their individual circumstances when assessing the financial requirements for opening a Desi District franchise.