What initial start-up expenses are included in the estimate for a Golden Krust Caribbean Restaurant?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
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ITEM 7. ESTIMATED INITIAL INVESTMENT
| YOUR ESTIMATED INITIAL INVESTMENT | |||||
|---|---|---|---|---|---|
| Golden Krust Caribbean Restaurant (Traditional Restaurant) or Jerk ‘N Patties Restaurant | |||||
| Type of Expenditure | Type of Expenditure Amount | When Due | To Whom Payment Is To Be Made | ||
| Initial Franchise Fee1 | $40,000 | Lump Sum | On signing Franchise Agreement | Us | |
| Leasehold | $81,000- | As Agreed | As Vendors | Outside Contractors | |
| Improvements2 | $407,000 | Require | |||
| Furniture, Fixtures | $48,000- | As Agreed | As Vendors | Outside Vendors | |
| and Equipment3 | $98,000 | Require | |||
| POS – Computer Hardware & Implementation4 | $2,700- $3,900 | As Agreed | As Vendors Require | Outside Vendors | |
| Signage | $4,400- $16,000 | As Agreed | As Vendors Required | Outside Vendors | |
| First Month’s Rent5 | $3,000- $15,000 | Lump Sum | As specified in lease or sublease | Landlord | |
| Security Deposit5 | $0-$45,000 | Lump Sum | On signing lease or sublease | Landlord | |
| Opening Inventory and Supplies6 | $10,000- $18,000 | As Agreed | As Suppliers Require | Third Party Suppliers, Golden Krust Caribbean Bakery, Inc. | |
| Grand Opening | $3,000- | Lump Sum | As Vendors | Outside Vendors | |
| Advertising7 | $10,000 | Require | |||
| Training Expenses8 | $2,500- $5,000 | As Incurred | As Incurred | Third Parties | |
| Miscellaneous | $8,000- | As Incurred | As Suppliers/ | Third Parties | |
| Opening Costs9 | $18,000 | Vendors Require | |||
| Additional Funds | $10,000- | As Incurred | As Expenses | Third Parties | |
| 3 months10 | $100,000 | Occur | |||
| TOTAL ESTIMATED INITIAL INVESTMENT | $212,600 - $775,900 | Costs paid to us are not refundable, except as specifically described below. Whether any costs paid to third parties are refundable will vary based on the third parties' business terms. We do not provide any direct or indirect financing for the Initial Franchise Fee or other fees and costs paid to us or to third parties. If you meet the credit requirements determined by third party vendors, you may be able to obtain financing. The availability and terms of financing will depend on many factors, including the availability of financing generally, your creditworthiness and collateral, and lending policies of the financial institutions from which you request a loan. We do not determine the terms and conditions of any financing and we do not provide any guarantees for any financing provided to you by third parties. |
Explanatory Notes
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- See Item 5 for more detailed information about the initial franchise fee.
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- The size of a restaurant is estimated to be 1,200 to 3,500 square feet. Costs of leasehold improvements, which include architects/engineering fees, municipality fees, floor covering, wall treatment, counters, ceilings, painting, window coverings, electrical, carpentry, plumbing, HVAC and related work and contractor's fees, will vary significantly depending on the condition, location and size of the premises, and any construction, heating and air conditioning systems or other allowances granted by the landlord after negotiations.
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- This item includes sinks, refrigerators, ovens, stoves, menu board, fryers, cookers, cooking exhaust and fire suppression system, display cases, tables, chairs, booths, utensils, cash registers, desk, filing cabinets safes, and related office supplies. The low end of the range assumes that you take over an existing restaurant space with some of these items already in place. The high end of the range assumes that all new equipment is purchased.
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- This item includes the cost for a phone system, computer, fax system, broadband service, inventory and scheduling software subscription, the POS system setup, and the Golden Krust App setup.
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- The amount of the first month's rent and security deposit will depend on the size, condition and location of the premises and the demand for the premises among prospective lessees. This fee may be refundable depending on the terms of the agreement with the Landlord.
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- The difference between the low and high ranges is attributable to the actual size of the restaurant and the amount and variety of the food and restaurant products, materials and supplies necessary for the opening of the Restaurant in compliance with our prescribed standards and specifications.
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Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 13–15)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the estimated initial investment ranges from $212,600 to $775,900. This includes several categories of expenses that a new franchisee can expect to incur. The initial franchise fee is $40,000, paid as a lump sum when signing the Franchise Agreement. Leasehold improvements are estimated to cost between $81,000 and $407,000, while furniture, fixtures, and equipment range from $48,000 to $98,000. The POS (Point of Sale) computer hardware and implementation is estimated to cost between $2,700 and $3,900. Signage costs range from $4,400 to $16,000. First month’s rent is estimated between $3,000 and $15,000, and the security deposit could be between $0 and $45,000. Opening inventory and supplies are projected to cost between $10,000 and $18,000. Grand opening advertising is estimated to cost between $3,000 and $10,000. Training expenses are estimated between $2,500 and $5,000. Miscellaneous opening costs range from $8,000 to $18,000. Additional funds for the first 3 months of operation are estimated to be between $10,000 and $100,000.
The initial start-up expenses also include costs for a phone system, computer, fax system, broadband service, inventory and scheduling software subscription, the POS system setup, and the Golden Krust App setup. The cost of leasehold improvements includes architect/engineering fees, municipality fees, floor covering, wall treatment, counters, ceilings, painting, window coverings, electrical, carpentry, plumbing, HVAC and related work and contractor's fees, will vary significantly depending on the condition, location and size of the premises, and any construction, heating and air conditioning systems or other allowances granted by the landlord after negotiations. Furniture, fixtures, and equipment include sinks, refrigerators, ovens, stoves, menu board, fryers, cookers, cooking exhaust and fire suppression system, display cases, tables, chairs, booths, utensils, cash registers, desk, filing cabinets safes, and related office supplies.
The document notes that the amount of the first month's rent and security deposit will depend on factors such as the size, condition, and location of the premises. The cost of a security system is $8,000 to $12,000. These expenses also include miscellaneous opening costs and expenses such as installation of telephones, deposits for gas, electricity and related items, installation of security systems, business licenses, legal and accounting expenses and insurance premiums. The difference between the low and high ranges is attributable to the actual size of the restaurant and the amount and variety of the food and restaurant products, materials and supplies necessary for the opening of the Restaurant in compliance with our prescribed standards and specifications. The official opening of your store can take several formats and may include print media, digital media, third-party delivery promotions, radio, TV, DJ, bands, flyers, give-a-ways, etc. Training expenses include payroll, traveling, accommodations, etc. while participating in the required training courses. These figures are estimates, and Golden Krust cannot guarantee that you will not have additional expenses starting the business.