How do locations vary based on the model chosen for a Desi District franchise?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
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Notes
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- The Franchise Fee is due and payable at the time of executing the Franchise Agreement. Your lease security deposit and utility deposits will usually be refundable unless you owe money to the landlord or utility provider. None of the other expenditures in this table will be refundable. Neither we nor any affiliate finances any part of your initial investment. Each of these investment ranges varies depending on the type of franchise model you invest in. The Eatery model is a smaller footprint and operates as only a restaurant business. The Eatery and Market Model is a combination of restaurant and grocery business and requires a larger footprint and as a result more of an investment to open. In this Item 7, the lower end of the investment range generally accounts for the Eatery model and the higher end of the range of investment accounts for the Eatery and Market model.
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- Our estimates in this table assume you pay one month rent plus a security deposit before you open for business. For this to occur, you would need to negotiate a "free rent" period for the time it takes to build out your business. We expect that you will rent your location. If you choose to purchase real estate instead of renting, your costs will be significantly different.
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- Your utility deposit will depend on your market, credit score and other factors related to your location. This range accounts for your opening payment to the gas, water and electric company.
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- The leasehold improvements are the cost of construction to build out the unit in your market. This range of investment will vary greatly depending on your location and the cost of construction in your market. The locations will vary depending on whether you are based on the model you choose to invest in. The Eatery Model is typically based on a location that is 3,500 square feet in size and the Eatery and Market Model is typically 10,000 square feet in size.
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- The Market Introduction Program is the advertising and expense associated with advertising and promoting the new store opening.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 20–26)
What This Means (2024 FDD)
According to the 2024 Desi District FDD, the size and type of location varies depending on whether a franchisee chooses the Eatery model or the Eatery and Market model. The Eatery model is designed to be a smaller footprint, operating solely as a restaurant. The Eatery and Market model combines a restaurant with a grocery business, necessitating a larger space and a greater initial investment.
The FDD notes that the Eatery model typically occupies a space of around 3,500 square feet, while the Eatery and Market model requires approximately 10,000 square feet. This difference in size impacts various investment costs, including rent, leasehold improvements, and inventory. For example, the investment in products and inventory for the Eatery model ranges from $5,000 to $10,000, while the Eatery and Market model requires a significantly larger investment of $20,000 to $80,000, all of which will be purchased through Desi District's affiliate, TAR Distributors, Inc.
Prospective Desi District franchisees should carefully consider the location requirements and associated costs when choosing between the Eatery and Eatery and Market models. The larger footprint of the Eatery and Market model not only increases the initial investment but also may affect ongoing operational expenses such as rent and utilities. Understanding these differences is crucial for making an informed decision that aligns with the franchisee's financial capabilities and business goals.