If a franchisee adds the grocery model to their Desi District location, how does this affect the investment?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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There are two business models within the franchise system, a Eatery alone model and a Eatery and Market Model. Some of our locations are restaurant only and some are restaurants with grocery attached. Our initial franchisees will look to replicate the restaurant model and will look for locations ranging from 3,000 to 4,000 square feet (although they could add the grocery model which would substantially increase the investment). Franchisee locations should be highly visible and they should look for upscale demographics as outlined in the territory guidelines.
The two variations of the franchise model include:
- Model 1 Eatery. This will be a food service Indian Fusion restaurant focusing on street foods. We expect this model to average about 3,500 square feet.
- Model 2 Eatery and Market. This will replicate the model that we have been built in several locations around Dallas. It will offer boutique grocery items as well as a food service model for customers to purchase and consume meals and snacks on location.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 9–12)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, adding the grocery model to a Desi District location will substantially increase the investment. The document outlines two business models: an Eatery alone model and an Eatery and Market Model. The initial franchisees will likely replicate the restaurant model in locations ranging from 3,000 to 4,000 square feet, but they have the option to add the grocery model.
The Eatery model focuses on a food service Indian Fusion restaurant specializing in street foods, expected to average about 3,500 square feet. In contrast, the Eatery and Market model replicates existing locations around Dallas, offering boutique grocery items alongside the food service model, with sizes ranging up to 10,000 square feet. This significant difference in square footage indicates a larger space requirement for the combined model, which would naturally lead to higher costs for leasing, build-out, and inventory.
For a prospective franchisee, this means carefully considering the financial implications of choosing the Eatery and Market model. While the grocery component may offer additional revenue streams and a unique market position, it also requires a more substantial initial investment. Franchisees should evaluate their capital resources, market demand, and operational capabilities to determine which model best aligns with their business goals and financial situation. The larger footprint of the combined model also necessitates a location that can accommodate the increased space requirements, potentially impacting site selection and rental costs.