INVESTMENT

An initial investment estimate for opening up your own Colombian Coffee House

INVESTMENT

An initial investment estimate for opening up your own Colombian Coffee House

ESTIMATE OVERVIEW

Colombian Coffee House management has provided its franchise consulting firm, Franchise Marketing Systems (FMS), with financial estimates for the startup of a Colombian Coffee House unit.

The estimate represents the range of the initial investment for a new franchise and is a required item in the Disclosure Document.

It shows the potential franchise buyer what it will cost to open the business.

The range reflects the potential variations in rental or outright purchase, and other expenses in each area.

The expense items are preopening start-up expenses and do not represent any ongoing expenses unless identified otherwise.

$0
FRANCHISE FEE (SINGLE LOCATION)
$0
REQUIRED NET WORTH
$0
REQUIRED LIQUID CAPITAL

DESCRIPTION

LOW

HIGH

Real Estate/Rent

$1,800

$9,000

Utility

$100

$500

Leasehold Improvements

$60,000

$120,000

Market Introduction Program

$5,000

$10,000

Furniture, Fixtures, and Equipment

$35,000

$60,000

Computer Systems

$7,000

$10,000

Insurance

$500

$2,500

Signage

$5,000

$10,000

Office Expenses

$1,000

$2,000

Inventory

$4,000

$8,000

Licenses & Permits

$1,500

$3,000

Professional Fees

$1,000

$3,000

Working Capital

$30,000

$60,000

TOTAL BEFORE FRANCHISE COSTS

$151,900

$298,000

Training

$3,000

2 weeks

$7,500

Franchise Fee

$30,000

$30,000

TOTAL WITH FRANCHISE COSTS

$184,900

(AVG: $260,200)

$335,500

AGREEMENT OVERVIEW

In determining the term of a franchise agreement, three factors need to be taken into account:

  1. The franchisee’s need for security and an adequate period to achieve a good return on their investment.
  2. The franchisor’s need to incorporate flexibility into the system in order to facilitate change if the market should dictate.
  3. The nature of the competitive market within the restaurant franchise segment.

FRANCHISE DURATION

After examining current market conditions, we found that competitors offering similar franchises offer five to twenty-year terms with a variety of renewal options.

We have chosen to offer a ten-year term with an unlimited number of five-year renewals.

The return on investment is sufficient to warrant an initial term that is shorter than what is typical for similar franchise offerings.

Colombian Coffee House does not want to de-incentivize the franchisees from continuing the relationship with the franchisor.

This length of term tends to be the market norm today, giving the franchisee a long enough term to have an ROI.

Further, Colombian Coffee House will offer unlimited renewals to the franchisee.

ESTIMATE OVERVIEW

Colombian Coffee House management has provided its franchise consulting firm, Franchise Marketing Systems (FMS), with financial estimates for the startup of a Colombian Coffee House unit.

The estimate represents the range of the initial investment for a new franchise and is a required item in the Disclosure Document.

It shows the potential franchise buyer what it will cost to open the business.

The range reflects the potential variations in rental or outright purchase, and other expenses in each area.

The expense items are preopening start-up expenses and do not represent any ongoing expenses unless identified otherwise.

$0
FRANCHISE FEE (SINGLE LOCATION)
$0
REQUIRED NET WORTH
$0
REQUIRED LIQUID CAPITAL

DESCRIPTION

Low-High

Real Estate/Rent

$1,800 – $9,000

Utility

$100 – $500

Leasehold Improvements

$60,000 – $120,000

Market Introduction Program

$5,000 – $10,000

Furniture, Fixtures, and Equipment

$35,000 – $60,000

Computer Systems

$7,000 – $10,000

Insurance

$500 – $2,500

Signage

$5,000 – $10,000

Office Expenses

$1,000 – $2,000

Inventory

$4,000 – $8,000

Licenses & Permits

$1,500 – $3,000

Professional Fees

$1,000 – $3,000

Working Capital

$30,000 – $60,000

TOTAL BEFORE FRANCHISE COSTS

$151,900 – $298,000

Training

$3,000 – $7,500

(2 weeks)

Franchise Fee

$30,000

TOTAL WITH FRANCHISE COSTS

$184,900 – $335,500

(AVG: $260,200)

AGREEMENT OVERVIEW

In determining the term of a franchise agreement, three factors need to be taken into account:

  1. The franchisee’s need for security and an adequate period to achieve a good return on their investment.
  2. The franchisor’s need to incorporate flexibility into the system in order to facilitate change if the market should dictate.
  3. The nature of the competitive market within the restaurant franchise segment.

FRANCHISE DURATION

After examining current market conditions, we found that competitors offering similar franchises offer five to twenty-year terms with a variety of renewal options.

We have chosen to offer a ten-year term with an unlimited number of five-year renewals.

The return on investment is sufficient to warrant an initial term that is shorter than what is typical for similar franchise offerings.

Colombian Coffee House does not want to de-incentivize the franchisees from continuing the relationship with the franchisor.

This length of term tends to be the market norm today, giving the franchisee a long enough term to have an ROI.

Further, Colombian Coffee House will offer unlimited renewals to the franchisee.

NEXT STEPS

Becoming an owner of a Colombian Coffee House can be fulfilling both financially and personally.

Whether you are ready to get started or have further questions, please get in contact.

We look forward to discussing the franchise process with you and are excited to expand our brand with the right partners.

VIEW FRANCHISE STEPS
     
START FRANCHISE PROCESS

NEXT STEPS

Becoming an owner of a Colombian Coffee House can be fulfilling both financially and personally.

Whether you are ready to get started or have further questions, please get in contact.

We look forward to discussing the franchise process with you and are excited to expand our brand with the right partners.

Locations

…

Downtown Delray Beach

East Boca Raton

Join our mailing list to receive special offers, news & discounts!

Locations

…

Downtown Delray Beach

East Boca Raton

Join our mailing list to receive special offers, news & discounts!