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Investment Range
An Overview of Start-Up Costs
Liquid assets are one of the key indicators of
whether or not a prospective franchisee is capable of financing
an Arabica coffeehouse. We recommend liquid assets of at least $60,000
per store as a basis for pursuing in depth feasibility discussions.
The
following chart summarizes the major costs of opening a new Arabica
coffeehouse. Please keep in mind that these costs are estimates
only. Nevertheless, our experience tell us the costs ranges are realistic
for most areas under present market conditions.
The total required
investment in an Arabica coffeehouse also varies, depending on
the franchisee's real estate arrangement (lease or
purchase). Arabica has no financial involvement in the real estate,
but provides
experienced counseling in the site selection/development and
reserves the right to accept all proposed locations. The actual selection
purchase or leasing of the site is the franchisee's responsibility.
Typical Range of Costs for an Arabica Coffeehouse
* These figures are estimates, based on our
experience and current market conditions in Cleveland, Ohio.
| Franchise Fee |
Lower Range |
Higher Range |
| The franchise fee for an Arabica Coffeehouse is $25,000.
Includes $2,500 for grand opening advertising in addition
to our contribution of $1,500 for a total of $4,000 grand opening
advertising dollars. |
$25,000 |
$25,000 |
| Leasehold Improvements |
$39,000 |
$160,000 |
| This includes all permanent improvements to the leased premises
such as electrical, plumbing, air conditioning, counters, walls,
and other decor fixtures. |
| Equipment and Sign Package |
$41,500 |
$97,500 |
| As well as all restaurant equipment this includes
site sign, exterior and interior signage and installation. |
| Working Capital And Non-recurring Expenses |
$13,000 |
$33,000 |
| Includes the cost of architectural fees, business
permits, business travel, utility deposits, insurance, legal
expenses, initial accounting fees, casual labor expenses prior
to opening, payroll, opening inventory and training. |
| Additional Start-Up Funds |
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| This estimates your initial start-up expenses
during the first 90 to 120 days of business. These expenses
included payroll costs. These figures are estimates and ARABICA
cannot guarantee that you will not have additional expenses
before starting the business. Your cost will depend on factors
such as: how much you follow our methods and procedures; your
management skill, experience, and business acumen; local economic
conditions, the local market for our product, the prevailing
wage rate; and competition and sales level reached during the
initial period. |
| Grand Total |
$128,500 |
$365,500 |
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| Royalty |
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| The continuing royalty fee is 5.5% of monthly gross
sales for the 10-year license agreement. |
| Advertising Fee |
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| Under the terms of ARABICA's License Agreement,
franchisee's are currently required to pay 2.5% of gross sales.
In addition, the franchisee is required to participate in a local
Cooperative when and if it is formed. |
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