OKAY, BUT HOW MUCH?
Your Opening Expenses
Another important consideration in choosing a franchise is how much it will cost to open one.
If you have $100K in the bank and a good financial history, you can typically get an SBA loan to finance the total amount needed. We work with preferred lenders who can help streamline this process for you. Typically, you can get pre-qualified for an SBA loan within 48 hours of completing the necessary paperwork.
We have provided the table below to show a range for each expense category. This table is taken from our 2019 FDD (Franchise Disclosure Document). Please refer to the footnotes below the table for information regarding the individual expenses and other important details.
YOUR ESTIMATED INITIAL INVESTMENT
|Type of Expenditure (see Note 1)||Amount (see Note 2)|
Initial Franchise Fee
$20,000 - $30,000
$10,500 - $12,000
$7,000 - $13,000
Plans & Permits
$5,000 - $16,000
$135,000 - $260,000
Rent, Utilities and Security Deposits Before Opening
$5,000 - $34,000
$5,000 - $15,000
Furniture, Fixtures & Restaurant Equipment(7)
$40,000 - $65,000
Initial Supply of Smallwares(8)
$10,000 - $12,000
Initial Inventory (Food + Paper + Janitorial)(9)
$12,000 - $15,000
Office Equipment & Supplies(10)
$5,000 - $7,000
$19,000 - $21,000
$5,000 - $6,000
$5,000 - $6,000
$2,500 - $7,000
Insurance (First 3 months)(14)
$3,000 - $4,000
$0 - $15,000
Staff Training (16)
$10,000 - $20,000
Restaurant Opening Marketing(17)
$10,000 - $35,000
TOTAL ESTIMATED INITIAL INVESTMENT(19)
$315,000 - $599,000
- The typical size of a Chop Stop restaurant ranges from 1,100 to 1,400 interior square feet. For several items discussed below, your cost will increase as the number of square feet increases. Subject to our minimum standards, the size of your Restaurant is principally determined by requirements or restrictions that your landlord and local municipality or zoning boards may impose, and availability and cost of leasable space. This Table reflects your estimated initial investment for a single Restaurant operated under the Franchise Agreement. This information assumes that you will lease the premises for your Restaurant in an in-line plaza. If you lease the premises in a free-standing building or purchase the Restaurant premises, your costs will be higher.
- Except where otherwise noted, all fees that you pay to us are non-refundable. Third-party lessors, contractors and suppliers will decide if payments to them are refundable.
- We furnish you with prototypical plans for your Restaurant and you are required to work with the then-current designated designer for the system and to customize the recommended layout to your premises. You may also be required by local codes to engage an architect in connection with the build out of your Restaurant.
- You must contract with our designated construction supervisor to oversee your contractor and confirm that your Restaurant is constructed in accordance with our standards and specifications.
- Typical locations for your Restaurant are smaller free-standing, multiple use and strip mall locations. Assuming that you will lease the premises for your Restaurant, you will need to make certain leasehold improvements to the leased premises to comply with our approved plans and specifications. We anticipate that you will negotiate the cost of leasehold improvements as part of your rental expense. The exact cost or impact on your rental expense will depend on several factors, including the condition of the premises, whether you elect to do more than the minimum required renovations, the landlord’s agreement to reimburse you for certain improvements, the size and location of the premises for your Restaurant and other economic factors. Although we do not recommend that you purchase the land and building for your Restaurant, you will incur significantly greater costs in developing your Restaurant if you choose to do so. You will incur greater start-up costs if you cannot negotiate the cost of leasehold improvements as part of your rental expense.
- This amount includes estimated expenses for interior and exterior Restaurant signs and menu boards.
- This amount includes estimated expenses for dining area furniture, outdoor furniture, Restaurant equipment (refrigeration, cooking, heating and chopping equipment), trash receptacles and other fixtures for your Restaurant.
- This amount estimates the amount you spend on an initial supply of smallwares, which includes items such as steel bowls (for mixing salads), storage inserts, utensils, knives and other items.
- You will need to purchase an opening inventory of supplies that complies with our specifications and is purchased from approved suppliers. We may be a designated supplier for certain items. See Item 8 for additional information. This amount does not reflect amounts needed to replenish inventory during the initial stage of operation.
- This estimate includes desks, printers and other office equipment used in the operation of the Restaurant.
- We require you to purchase the point-of-sale system that we designate for the Restaurant. See Items 8 and 11.
- As described in Item 5, you must purchase an Opening Package that will include uniforms, umbrellas, gift cards, pictures and other in-store merchandising supplies used in the operation of your Restaurant.
- This includes fees that may be paid to outside attorneys, accountants, bookkeepers, human resource agencies and other professionals.
- You must purchase insurance coverage of the types and having the limits that we designate in the Operations Manual. The estimate listed is for your first 3 months of operation and is based on our current requirements, which are summarized in Item 8.
- This includes an estimate of travel expenses for 4 individuals to attend our initial training course as described in Item 11, and does not include any living expenses incurred during training. The low end of the range anticipates that you live near our required training location.
- You will incur labor costs to train your staff in the operation of a Chop Stop Restaurant.
- You must spend a minimum of $6,000 for Restaurant opening campaign expenses within the first 90 days after you open your Restaurant. You will use our designated media vendor (if any) and you must implement our recommended media plan (if any) in conducting the Restaurant opening campaign.
- This amount estimates the additional capital you will need during the first 3 months of Restaurant operations, including initial employee wages and fringe benefits, taxes, Restaurant supplies and interest payments on any business loans. It does not include inventory costs beyond the opening inventory costs identified in the Table and does not include any compensation paid to you during this 3-month period. These amounts are estimates, and we cannot guarantee that you will not incur additional expenses in starting the Restaurant. Your costs will depend on factors such as how much you follow our systems and procedures, your management skills and experience, local economic conditions, the local market for Chop Stop products, the prevailing wage rate, competition, the amount of the initial investment you decide to finance and the sales level reached during the initial period.
- This total is an estimate of your pre-opening initial investment and the expenses you will incur during the first 3 months of Restaurant operations. This total is based on our estimate of average costs and prevailing market conditions and CSI’s 7 years of experience operating Chop Stop restaurants. You should review this amount carefully with a business advisor before deciding to purchase the franchise. These figures are estimates only and we cannot guarantee that you will not have additional expenses in starting or operating your Restaurant.
We have not included a separate table for the initial investment if you sign a Development Agreement. If you become a Developer franchisee, you will pay a Development Fee of $12,500 per additional Restaurant you agree to develop according to the Development Schedule described in the Development Agreement (see Item 5). Other than the Development Fee, start-up costs for the individual Restaurants opened under the Development Agreement are the same as the estimated costs to open a single restaurant (which described in the table shown at the beginning of this Item 7) subject to potential increases over time due to inflation and other economic factors. We do not offer financing for Developer or any of our franchisees.