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Initial Investment
THE INITIAL INVESTMENT DATA PROVIDED IS A SUMMARY OF THE INFORMATION THE RISING ROLL GOURMET UNIFORM FRANCHISE OFFERING CIRCULAR (UFOC). TO RECEIVE THE UFOC, PLEASE CONTACT US.
| Expenditure |
Estimated
Amount or Estimated Low to High Range |
Method of Payment |
When Due |
Refundable |
To Whom Payment Is Made |
Initial
Franchise Fee ( Note 1) |
$30,000 |
Lump Sum |
On Signing Franchise Agreement |
See Item 5 |
Us |
|
$18,000 - $29,000 |
Monthly |
Before Opening |
No |
Third Parties |
Real
Estate Build-Out ( Note 3) |
$150,000
- $236,000 |
As Incurred |
As Incurred |
No |
Third Parties |
|
$2,000
- $4,000 |
Monthly |
As Incurred |
No |
Third Parties |
Furniture,
Equipment, Fixtures, Other Fixed Assets and Van ( Note
5) |
$15,000
- $20,000 |
Monthly |
As Incurred |
No |
Third Parties |
|
$7,000
- $10,000 |
As Incurred |
Before Opening |
No |
Us and Third Parties |
Security
Deposits and Other Prepaid Expenses ( Note 7) |
$1,500
- $2,500 |
As Incurred |
As Incurred |
No |
Third Parties |
|
$7,000
- $10,000 |
Annually |
As Incurred |
No |
Third Parties |
Miscellaneous
Operating Expenses ( Note 9) |
$20,000
- $30,000 |
|
|
|
|
|
$500
- $5,000 |
As Incurred |
As Incurred |
No |
Third Parties |
Opening
Advertising and Telephone Listing ( Note 11) |
$5,000-$10,000 |
As Incurred |
As Incurred |
No |
Third Parties |
Additional
Funds - 3 Months ( Note 12) |
$30,000
- $40,000 |
As Incurred |
As Incurred |
No |
Third Parties |
Total
Estimated Initial Investment |
$286,000-$425,500
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Explanatory
Notes:
1. See Item 5 of This Offering Circular
2. Your Restaurant will be approximately 2,000 to 4,000 square feet of Class A or Class B space and will include a dining room, a food counter and prep area, a kitchen area, a walk-in refrigerator, a storage room, restrooms, and a small office. The rental for your Restaurant will vary considerably depending on the size and location of the Restaurant. See Item 11 of this Offering Circular. We must approve any site you propose. You will have up to 120 days to select the site for your Restaurant. See Item 12 of this Offering Circular.
Class A retail space is defined by the Building Owners and Managers Association ("BOMA") as space in the most prestigious buildings competing for premier retail space users with above-average rental rates for the area along with high-quality standard finishes, state of the art systems, exceptional accessibility, and a definite market presence.
Class B space is defined by BOMA as space in buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and the systems are adequate, but the building does not compete with Class A at the same price.
The figures shown in the table include your real property rental and security deposits.
3. The figures shown in the table assume you are leasing a Restaurant site that requires average build-out. If you purchase the Restaurant site, or if your site requires extensive build-out, your expenses may be considerably higher. If your site requires little build-out, your costs may be considerably lower.
4. The figures shown in the table include two point-of-sale systems with computers. See Item 11 of this Offering Circular.
You will need to lease or purchase at least two point-of-sale systems with a server. We specify particular brands of computer hardware and related hardware you must use. We must be able to obtain sales and other information we require automatically on our request from your computer. See Item 11 of this Offering Circular. The estimates shown assume that you lease two point-of-sale systems with two computers. If you purchase your point-of-sale system and computer hardware, your initial costs will be higher. The estimates do not include the costs of the computer software described in Item 11 of this Offering Circular; we include these under the "Miscellaneous Opening Expenses" heading. We estimate these costs will be between $500 and $1,000. We do not require you to use any software we have developed, although we reserve the right to do so in the future. See Item 11 of this Offering Circular.
5. You will need deli cases, display cases, a walk-in refrigerator, a stand-alone refrigerator, tables, chairs, stoves, microwave ovens, convection ovens, grills, racks, a meat slicer, sinks, prep tables, and an ice machine. You will also need a fax machine, a music system, and telephones, in addition to office furniture and miscellaneous fixtures, other equipment, supplies, and signs. You will offer catering services, so you will need to purchase or lease a van.
Your costs will vary depending on the size, configuration, and condition of the items you select, general economic conditions, your geographic location, and your persistence in obtaining the best prices available. The estimates shown in the table assume that you lease good-quality new items; if you elect to purchase them, your initial costs will be substantially higher. The figures shown include security deposits for the items you lease.
6. This represents your initial investment in food and ingredients. See Item 8 of this Offering Circular.
7. Utility companies and rental companies will probably require you to pay deposits and prepaid expenses.
8. Before you open the Franchised Business, you must obtain certain insurance policies we require, with coverage limits, endorsements, and other terms and conditions we require. We presently require the following insurance policies and coverages from a carrier rated A or better by Alfred M. Best and Company, Inc.:
| Type of Insurance |
Amount |
| Comprehensive general liability |
Combined single limit for each occurrence of at least $2,000,000; may not have a deductible or self-insured retention of greater than $5,000 |
| Fire and Extended Coverage Insurance |
Amount adequate to replace your Franchised Business and property in the event of an insured loss |
| Business Interruption Insurance |
Amount adequate to cover: (i) your most recent 12 months' actual fixed expenses, including maintenance of competent personnel and profit margins, if your Restaurant has been in operation for 12 months or greater; or (ii) your estimated fixed expenses for 12 months, including maintenance of competent personnel and profit margins, if your Restaurant has been in operation for fewer than 12 months |
| Automobile Liability Coverage for Owned, Non-Owned, and Hired Vehicles |
Following minimum limits of liability: (i) the greater of the amount required by all laws or $1,000,000, for each person killed or injured; (ii) subject to the limit shown in clause (i) above, a total minimum limit of liability of $2,000,000 for any number of persons injured or killed in one accident; and (iii) $300,000 for injury, destruction, or loss of use of property of third persons as the result of any one accident |
All policies must: (i) insure you; (ii) name us as an additional insured; (iii) provide that your insurance carrier must give us at least 30 days' written notice before any cancellation or modification of your policies; and (iv) contain a waiver by the insurance carrier of all subrogation rights against us and other parties covered by the insurance. Your insurance costs may not be uniform because insurance premiums differ depending on your location, your insurance company's assessment of the risk of insuring you, the amounts of insurance you need, your insurance history, applicable law in the jurisdiction where your Restaurant is located, and general economic conditions. We may increase the minimum insurance limit or require different kinds of insurance to reflect changes in prudent business practices, and in response to court awards and other relevant circumstances.
9. These figures include the costs and expenses you will incur to: (i) obtain legal counsel to review the Franchise Agreement and this Offering Circular, and to form your company; (ii) obtain an accountant to set up your accounting systems; (iii) obtain any business licenses you will need to operate the Franchised Business; and (iv) purchase signage, smallwares (like pots and pans), and a menu board.
10. You or the attendees you designate must attend our Manager Training before you open your Restaurant. See: (i) Item 6, Explanatory Note 6; and (ii) Item 11, of this Offering Circular. Costs vary due to the number of attendees you designate, distances from your location to our training site, and the quality of the food and lodging your attendees choose.
11. Your advertising cost is directly related to the amount and type (in-person meetings, yellow page advertisements, targeted advertisements, television and radio advertisements, brochures, newspaper advertisements, direct mail, etc.) of advertising you conduct. You must spend at least 2% of your prior year's Gross Revenues or $20,000, whichever is greater, on a program of local advertising in your Territory, plus 1% of your Gross Revenues for the National Advertising Fund. You must spend at least $5,000 in grand opening advertising and other promotions during the period beginning 30 days before you open your Restaurant and ending 60 days after you open your Restaurant. Your grand opening advertising is in addition to your Local Advertising Requirement.
12.The "Additional Funds" category covers the initial expenses you are likely to incur while you establish the Franchised Business. These expenses include costs of performing background checks, hiring employees, and purchasing other goods and services. Your expenditures will depend on factors like your business skills and experience, general and local economic conditions, competition, the prevailing wage rate, the amount of services you provide during the initial period, how well your business is performing, and the number of hours you are willing to invest in your Franchised Business. We assume that one or more of your owners will serve multiple roles in your Franchised Business, including the roles of full-time Manager. These expenses do not include any draw or salary for the owners of the Franchised Business, but they do include payment for your employees.
13.In compiling this chart, we relied on the experience of W Squared in the operation of fast-casual sandwich and deli restaurants, and on information we and W Squared gained from our experience in food service, franchising, and the System. Many of the expenses listed in the table are not within our control and are determined more by general and local economic conditions than our actions. We do not offer direct or indirect financing to you for any of these expenses. A bank or other lending institution may finance all or a part of your investment on terms we cannot estimate. The availability and terms of financing will depend on factors like the availability of financing, your creditworthiness, collateral you may have, lending policies of your financial institution, and local economic conditions.
The amounts shown are estimates only and are likely to vary significantly for many reasons. You should review these estimates carefully with a business advisor before you make any decision to enter into the Franchise Agreement with us.
14.See Item 5 of this Offering Circular. If you and we enter into the Option Addendum and you open a new restaurant under it, your costs will be substantially the same as shown in the table, except that: (i) your training expenses may be lower; and (ii) you may be able to advertise jointly with the Franchised Business, thereby amortizing your expenses for your Opening Advertising and Telephone Listing over two businesses rather than one.
None of the communications on this web site should be construed as an offer to sell a franchise. We will not offer any franchise for sale: (i) until your state has duly registered our franchise offering or duly exempted our franchise offering from registration, if your state requires registration or exemption; and (ii) until we have duly delivered our Uniform Franchise Offering Circular to you in compliance with applicable law.
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