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ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
as of 10/15
|Type of Expenditure||Amount (1)||Method of Payment||When Due||To Whom Payment Is To Be Made|
|Development Fee (2)||$5,000||Lump Sum/Cash||At signing of the Development Agreement||Pie Five|
|Initial Franchise Fee||$20,000||Lump Sum/Cash||No later than the date on which you sign the Franchise Agreement||Pie Five|
|Grand Opening Advertising (3)||$15,000||As arranged||As arranged||Vendors|
|Real Estate (4)||Variable||As Arranged||Before Opening||Landlord, Lender|
|Architectural Design Services (5)||$10,000 – $20,000||As Arranged||Before Opening||Independent Architects and Engineers|
|Construction/Leasehold Improvements (6)||$180,000 – $222,000||See Note 4||Before Opening||Construction Company|
|Travel and Living Expenses While Training (7)||$10,000 – $15,000||As Arranged||Before Beginning Training||Airlines, Hotels, Restaurants|
|Furnishings, Fixtures, Equipment and Signage (8)||$125,000 – $155,000||As Arranged||As Ordered||Suppliers||Signage (9)||$7,500 – $15,000||As Arranged||As Ordered||Suppliers||Exterior Trade Dress (10)||$0 – $61,000||As Arranged||As Ordered||Suppliers|
|Smallwares||$12,000 – $16,000||As Arranged||As Ordered||Suppliers|
|Initial Inventory (11)||$4,000 – $6,000||As Arranged||Before Opening||Norco and/or Suppliers|
|Miscellaneous Opening Costs (12)||$12,000 – $20,000||As Arranged||Before Opening||Suppliers, Utilities, etc.|
|Register or Point of Sale System (13)||$10,000 – $16,000||As Arranged||As Arranged||Supplier|
|Additional Funds — 3 months (14)||$8,000 – $18,000||As Arranged||As Incurred||Employees, Suppliers, Utilities|
|Total (15)||$418,500 – $604,000 (Does not include rent)|
(1) Costs paid to us or our affiliates are not refundable. Whether any costs paid to third parties are refundable will vary based on the practice in the area where the Franchised Restaurant is located.
(2) As described more fully in Item 5, if you enter into a Development Agreement, you must pay $5,000 for each Franchised Restaurant you agree to develop under the Development Agreement.
(3) You must conduct initial marketing for the Franchised Restaurant in accordance with a grand opening plan that you have prepared and to which we have consented (“Grand Opening Plan”). Under the Grand Opening Plan, you will be required to spend a minimum of $15,000 on grand opening advertising over the period beginning one month prior to opening and continuing through the second month after opening. Guidelines for grand opening activities will be included in the Manual. Within 10 days after the end of the period in which you conduct this initial marketing, you must submit appropriate documentation to verify compliance with the grand opening expenditure obligation. The amount spent on your grand opening expenditure obligation is not credited against your Advertising Obligation.
(4) The cost of acquiring a location for the Franchised Restaurant will vary significantly depending on the geographic location. We expect that you will lease the land and building for the Franchised Restaurant. Alternatively, you may wish to buy land for the Franchised Restaurant. If you chose to lease, the rent may range from $40 to $50 per square foot per year based on our affiliate’s experience in the Dallas/Fort Worth market. This estimate is based on a restaurant of approximately 2,200 square feet. You may be required to pay the first and last month’s lease payment upon signing your lease agreement.
(5) The cost of architectural design services will vary depending on the geographic location, size and condition of the premises.
(6) The cost of constructing a Pie Five Restaurant will vary depending upon the size, condition, and location of the premises, price differences between various suppliers, contractors and shipping distances from suppliers, and labor costs. This estimate is based on the buildout costs for a building shell for a Pie Five Restaurant of approximately 2,200 square feet in a typical in-line retail center space with construction costs ranging from approximately $55 to $88 per square foot. All construction materials and fixtures must meet our standards and specifications but may be purchased from any supplier. These costs are normally payable to third parties prior to the opening of the Pie Five Restaurant or in periodic installments, depending on the type of financing arrangement you are able to obtain. We do not undertake to assist you in arranging financing, and there is no assurance that financing will be available to you. Generally, the availability and terms of financing will depend upon many factors, including, particularly, your creditworthiness.
(7) As described in Item 11, prior to opening a Pie Five Restaurant, you (or your Operating Principal), the Franchise Restaurant’s general manager, and any other managerial personnel whom we designate must attend the MIT Program. We do not charge tuition for this training program, but you are responsible for all salaries, benefits, and travel, living, and other expenses incurred by you and your employees while attending the training. The cost of these expenses will depend on the distance you must travel, the types of accommodations, the number of your employees attending training, and their wages.
(8) You must purchase certain items of furniture, fixtures, and equipment. The cost of purchasing equipment may vary as a result of price differences between suppliers and shipping distances from suppliers. You may purchase or lease approved brands and models of equipment from any approved supplier. Payment for these items typically will be made prior to the opening of the Franchised Restaurant or in installments over a period of time, depending on the type of financing arrangement you are able to obtain. Generally, the availability and terms of financing will depend upon many factors, including your creditworthiness.
(9) The high end of the range represents an end cap location. This estimate includes costs for a building sign, pylon sign (if allowed by landlord and local code requirements).
(10) The high end of the range represents an end cap location, including, patio, umbrellas and architectural design elements on the building.
(11) The cost of an opening inventory of food, beverages, ingredients, and other supplies and materials will vary depending on shipping distances from suppliers and price differences between suppliers. As described in Item 8, these items must conform to specifications established by us and/or be purchased from us and/or approved suppliers.
(12) This item covers such miscellaneous pre-opening costs and expenses as manager and employee labor, utilities and utility deposits, lighting supplies, office supplies, security deposit, pest control, postage and shipping, storage fees, bank service charges, payroll service charges, licenses, permits and a three-month premium for typical insurance coverage. Manager and employee labor expenses vary according to the wage rate and number of employees and managers hired and trained before opening your Franchised Restaurant.
(13) A description of the computer system can be found in Item 11.
(14) This is our estimate of your operating expenses for the initial 3 months of your business, including payroll costs for management, rent, insurance, and utilities. These expenses do not include advertising or royalty payments made to us. The estimate also does not take into account revenue you may take in. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your actual costs will depend on factors such as how closely you follow our methods and procedures; your management skill, experience and business acumen; financing costs; local economic conditions; the local market for the Franchised Restaurant; the prevailing wage rate; competition in the market place; and the sales level reached during the initial period.
(15) We relied on the experience of our affiliate in the restaurant business to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase a franchise. We do not offer financing directly or indirectly for any part of the initial investment.
- Experienced multi-unit restaurant operators
- Above store systems in place (perhaps already operating one or two other concepts or at least the ability to put an above restaurant system in place to operate multiple restaurants)
- Financial wherewithal to develop the entire MSA (we are not splitting markets with multiple franchisees or company and franchise operators)
- Live and/or operate in the market you franchise
- No Jerks! (Yes, that is a serious rule. We want a small group of franchisees who are aligned and can come together to operate consistently, and frankly, that we like hanging out with and building a brand with. We’re planning on doing this together for many years.)
On-site training prior to grand openings
- Weekly calls
- Initial store set up
- Hands-on crew training
- POS training
- Recipe training
Fully supported training for first two stores
- Three people one week pre-open
- Lead trainer stays one week post-open
- Ongoing support as needed – FSM (Franchise Support Manager)