|
Expenditures
|
Est. Low-High Range
|
When Payable
|
Method of Payment
|
Whether Refundable
|
To Whom Paid
|
|
Initial Franchise
Fee1
|
$35,000
|
Upon signing franchise agreement
|
Lump Sum
|
No
|
VTG HOSPITALITY GROUP, LLC
|
|
Real Property2
|
$3,000-6,000
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Leasehold Improvements2
|
$80,000-140,000
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Equipment2
|
$50,000-80,000
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Basic Security System (no monitoring costs)
|
$1,000-1,500
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Freight Charges (varies by location)
|
$2,000-2,900
|
As Incurred
|
|
No
|
Third Parties
|
|
Outside Signage
|
$2,000-4,000
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Opening Inventory3
|
$2,000-3,000
|
As Incurred
|
|
No
|
Third Parties
|
|
Insurance
|
$1,250-2,300
|
As Incurred
|
As Agreed
|
No
|
Third Parties
|
|
Supplies3
|
$1,000-1,900
|
As Incurred
|
|
No
|
Third Parties
|
|
Training Expenses4
(including travel & lodging)
|
$1,900-2,500
|
As Incurred
|
|
No
|
Third Parties
|
|
Legal and Accounting
|
$500-2,500
|
As Incurred
|
|
No
|
Third Parties
|
|
Opening Advertising
|
$2,000-5,000
|
As Incurred
|
|
No
|
Third Parties
|
|
Misc. Expenses5
|
$6,000-8,000
|
As Incurred
|
|
No
|
Third Parties
|
|
Additional Funds — 3 months6
|
$15,000-30,000
|
As Incurred
|
|
No
|
Third Parties
|
|
Total Est. Initial Investment
|
$202,650-289,600
|
|
|
|
|
An additional $35,000 to $50,000 in reserved capital beyond the above figures is strongly recommended.
All total investment figures represent approximate costs based on the size of your store location and the extent of renovations or capital improvements required. A lower cost store is one that would require fewer leasehold improvements, less seating and fewer equipment expenditures. Therefore, it may not be possible to build a store for the "lower" total investment cost listed. Because these figures are only estimates, it is possible to significantly exceed costs in any of the areas listed above. Actual costs will vary, depending on physical size and current condition of the premises. To avoid excessive construction costs, it is strongly recommended that you pick contractors carefully by obtaining several competitive bids beforehand. These estimates do not include exterior renovations. The above costs may be significantly higher in many high-density metropolitan areas.
Explanatory Notes:
1. See Item 5 of offering circular for further explanation.
2. Your restaurant site location must have a minimum of 1,600 square feet and be properly equipped. The exact size will depend on the available retail space in your area. The actual cost of the restaurant space will be based on many factors, including whether you lease or purchase the space, the size, the condition, the landlord-included tenant improvements (if any), the length of your lease term, the demand for your location and space, the tenant-finish or improvements you choose and how you choose to furnish and equip the site, using either new or pre-owned equipment and fixtures.
3. This category consists of your deposits and initial purchase of food, drink and paper supplies you will need upon opening.
4. You or your principal owner must attend and complete the mandatory five-day Chip’s Authentic Southern Cookin’ Restaurants® franchisee/licensee training program. Only one person may attend this training without payment of any additional training fee. You will be responsible for the training fee (presently $335) for each additional person who attends training and for the travel, food and lodging expenses incurred by every person attending the training program in Atlanta, Georgia.
5. This category covers miscellaneous opening costs and expenses for such things as business licenses, utility deposits, small equipment purchases, membership into the local Chamber of Commerce as well as surplus capital needed for opening.
6. This category estimates your initial start-up expenses (other than those identified) for a three-month period after the restaurant begins operations. These expenses include such things as payroll cost (to others than yourself), rent or mortgage payments and other overhead expenses. These figures are only estimates and VTG HOSPITALITY GROUP, LLC cannot guarantee that you will not have ongoing expenses that either meet or exceed these ranges. Your ongoing costs will depend on factors such as: How much you follow Chip’s Authentic Southern Cookin’ Restaurants® training methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market and demand for your food service product; the prevailing wage range; and competition.
VTG HOSPITALITY GROUP, LLC has relied on the food sales and distribution experience of some of its top executive officers and on financial information obtained from other Chip’s Authentic Southern Cookin’ Restaurants® operating sites in compiling these estimates. Initial investment costs for particular categories may vary significantly depending on a number of factors including such things as the geographic location of the restaurant and whether or not it is a conversion of an existing restaurant. Except as discussed in Item 10 of the offering circular, VTG HOSPITALITY GROUP, LLC does not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing that is available to you will depend on many factors, such as the availability of financing generally, your creditworthiness, collateral you may have and lending policies of financial institutions from which you may request a loan.
As of January 6, 2006, several financing programs have been made available to qualified purchasers with as little as 10% down payment through Regions Bank, an approved lender of Franchisor. For specific and detailed information on our Franshise & License Programs or for a copy of our Uniform Franchise Offering Circular, an application must be submitted.