What is the maximum estimated cost for leasehold improvements for a 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 | U |
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 cost for leasehold improvements ranges from $390,000 to $520,000. Leasehold improvements refer to the construction costs required to prepare the franchise location for operation in a specific market.
This investment can vary significantly based on the location and the prevailing construction costs within that market. The cost is also dependent on the franchise model chosen, with the Eatery Model typically located in a 3,500 square foot space, while the Eatery and Market Model requires a larger 10,000 square foot space, thus impacting the overall cost of leasehold improvements.
A prospective Desi District franchisee should carefully consider these factors and conduct thorough due diligence to estimate the actual costs in their specific market. Understanding the scope of work required and obtaining competitive bids from contractors is essential to managing this significant initial investment.
It is important to note that the FDD advises that franchisees may be able to negotiate a 'free rent' period to offset the costs incurred during the build-out phase. This negotiation could provide some financial relief during the initial investment period.