Type of Expenditure Amount Method Due To whom
Initial franchise fee(1) $50,000 Lump sum On signing Franchise Agreement
or Preliminary Agreement
(and, if applicable, Development Rights Rider)
Us
Artwork package fee(1) $40,000 - $48,000 Lump sum On signing franchise agreement Us
Architectural fee(2) $65,000 - $115,000 Lump sum After selection of site Architect
One month rent(3) $10,000 - $21,500 Lump sum Monthly Landlord
Security deposit(3) $10,000 - $21,500 Lump sum On signing lease or sublease Landlord
Retail Merchandise Display
(including Inventory)
$7,500 - $18,000 Lump sum As Incurred Outside Suppliers
Equipment(4) $270,000 - $325,000 As agreed As incurred Outside Suppliers
Leasehold improvements(5) $675,000 - $1,075,000 As agreed As incurred Outside Suppliers
Signage $40,000 - $70,000 As agreed As incurred Outside Suppliers
Opening inventory(6) $50,000 - $73,000 Lump sum Before opening Outside suppliers
and Us
Small wares $23,000 - $30,000 As agreed Before opening Outside suppliers
and Us
Pre-Opening Labor &
Training Expenses
(7)
$80,000 - $90,000 As incurred As incurred Third parties
Insurance(8) $5,000 - $8,000 As incurred As incurred Insurance carriers
and agents
Furniture(9) $75,000 - $105,000 As agreed Before opening Outside suppliers
POS system $30,000 - $50,000 As incurred As incurred Third parties
Audio visual equipment $40,000 - $80,000 As incurred As incurred Third parties
Misc. opening costs(10) $13,000 - $15,500 As incurred As incurred Third parties
Additional funds - 3 mo.(11) $50,000 As incurred As incurred Third parties
Total Estimated Investment (including real estate lease costs for 1 month)*(12) $1,533,500 - $2,245,500
>Return To Top< *Except for the initial franchise fee deposit paid under the Preliminary Agreement and any unused portions of the artwork package, architectural, and civil engineering fees, no expenditure in the table above is refundable.
Type of Expenditure Amount Method Due To whom
Initial franchise fee(1) $50,000 Lump sum On signing franchise agreement
or preliminary agreement
(and, if applicable, Development Rights Rider)
Us
Artwork package fee(1) $40,000 - $48,000 Lump sum On signing franchise agreement Us
Architectural fee(2) $65,000 - $115,000 Lump sum After selection of site Architect
Civil engineering fee(3) $15,000 - $25,000 Lump sum As incurred Engineer
Real estate purchase(4) $350,000 - $1,000,000 Down-payment
& then mortgage
As incurred Seller of
real estate
Site work(5) $200,000 - $500,000 As agreed As incurred Outside suppliers
Building construction(6) $1,300,000 - $1,800,000 As agreed As incurred Outside suppliers
Retail Merchandise Display
(including Inventory)
$7,500 - $18,000 Lump sum As Incurred Outside Suppliers
Equipment(7) $270,000 - $325,000 As agreed As incurred Outside suppliers
Signage $40,000 - $80,000 As agreed As incurred Outside suppliers
Opening inventory(8) $50,000 - $73,000 Lump sum Before opening Outside suppliers
and Us
Small wares $23,000 - $30,000 As agreed Before opening Outside suppliers
and Us
Pre-Opening Labor &
Training Expenses
(9)
$80,000 - $90,000 As incurred As incurred Third parties
Insurance(10) $5,000 - $8,000 As incurred As incurred Insurance carriers
and agents
Furniture(11) $75,000 - $105,000 As agreed Before opening Outside suppliers
POS system $30,000 - $50,000 As incurred As incurred Third parties
Audio visual equipment $40,000 - $80,000 As incurred As incurred Third parties
Misc. opening costs(12) $13,000 - $15,000 As incurred As incurred Third parties
Additional funds - 3 mo.(13) $50,000 As incurred As incurred Third parties
Total Estimated Initial Investment (including real estate purchase and building construction costs)*(14) $2,703,500 - $4,462,500
>Return To Top< *Except for the initial franchise fee deposit paid under the Preliminary Agreement and any unused portions of the artwork package, architectural, and civil engineering fees, no expenditure in the table above is refundable.
  1. We describe the initial franchise, artwork package, and architectural fees in Item 5.
  2. The architectural fee covers the cost of third-party architect(s) and/or engineer(s) we select and you hire to prepare the Restaurant's architectural and site plans.
  3. You may lease or buy the Restaurant's premises. The table above describes the costs associated with obtaining and developing leased premises for the Restaurant. The table below describes the costs associated with buying the real estate upon which you will construct a new building for the Restaurant. The Restaurant typically is a free standing unit or in a strip mall in a commercial area. It is approximately 4,000 to 6,000 square feet. The Restaurant's size will depend on many factors, including the ability to place coolers and freezers outside the Restaurant and the number of seats we require. If you lease the premises, rent and security deposit depend on the site's size, condition, and location and the demand for the site among prospective lessees. This estimate reflects a possible 1-month range for rent and security deposit, but your rent and security deposit could be higher depending on the site's particular characteristics, especially if it is in a large metropolitan area. A "Shell Premises" means the unfinished retail space typically provided by a landlord when leasing the premises.
  4. You may lease or buy the Restaurant's premises. The Restaurant typically is in a commercial area. The first table in this Item 7 describes the costs associated with obtaining and developing leased premises for the Restaurant. The table immediately above describes the costs associated with buying the real estate upon which you will construct a new building for the Restaurant. Real estate costs depend on location, size, visibility, economic conditions, accessibility, competitive market conditions, and the type of ownership interest you are buying. Because of numerous variables affecting real estate acquisition costs (for example, financing costs and down-payment), this estimated initial investment might not reflect the total costs of buying real estate and constructing a building suitable for the Restaurant. Property should have excellent visibility from a main road, a minimum of one acre, and no restriction preventing development of the Restaurant as a full-service restaurant with liquor sales.
  5. Site work typically includes storm water drainage, water retention, grading, and parking lot. The cost of the Restaurant's site work will depend on the extent of the remediation required for the site to become pad ready.
  6. Building construction includes costs associated with slab, foundation, frame, plumbing, electrical, mechanical, interior walls and finishes, millwork and ceiling.
  7. Required equipment includes ovens, sinks, stoves, dishwasher, freezer, slicers, cooler, water heaters, and ice makers.
  8. You must have an adequate opening supply of food and beverage products, small kitchenwares, cleaning, paper and packaging supplies, beverage cups and lids, report forms, and marketing materials. You may buy these items from us or independent suppliers.
  9. This covers travel and car rental expenses, hotel and food rates, and compensation for your principals and employees during training.
  10. Premiums for your Restaurant's insurance coverage depend on the insurance company, a state's workers' compensation rates, the fire rating on the Restaurant's structure, the Restaurant's size, and excess or extra coverages you choose. This premium range covers a 1-month period.
  11. Furniture includes tables, booths, chairs, and similar Restaurant items.
  12. These include utility, vendor and sales tax deposits, business licenses, and legal, accounting and organizational costs.
  13. This line-item estimates the funds needed to cover your initial expenses during the first 3 months of operation (other than the items identified separately in the table). These expenses include payroll costs but not any draw or salary for you. However, this is only an estimate, and it is possible that you will need additional working capital during the first 3 months you operate your Restaurant and for a longer time period after that. This 3-month period is not intended, and should not be interpreted, to identify a point at which your Restaurant will break even. We cannot guarantee when or if your Restaurant will break even. Your costs will depend on whether you follow our methods and procedures; your management skill, experience, and business acumen; local economic conditions; the nature of the local market for your products and services; the prevailing wage rate; competition; and your Restaurant's sales during the initial period. We relied on our franchising experience since 1987, and our experience in operating (on and off) Mellow Mushroom restaurants since 1974, to compile this Additional Funds estimate.
  14. You should review these figures carefully with a business advisor before deciding to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing depend on the availability of financing generally, your creditworthiness and collateral, and lending policies of financial institutions from which you request a loan.
Type of Expenditure Amount Method Due To whom
Initial franchise fee(1) $50,000 Lump sum On signing franchise agreement
or preliminary agreement
(and, if applicable, Development Rights Rider)
Us
Artwork package fee(1) $40,000 - $48,000 Lump sum On signing franchise agreement Us
Architectural fee(2) $65,000 - $115,000 Lump sum After selection of site Architect
One Month Rent(3) $10,000 - $21,500 Lump Sum Monthly Landlord
Security Deposit(3) $10,000 - $21,500 Lump Sum On signing lease or sublease Landlord
Retail Merchandise Display
(including Inventory)
$7,500 - $18,000 Lump sum As Incurred Outside Suppliers
Equipment(4) $270,000 - $325,000 As agreed As incurred Outside suppliers
Leasehold Improvements(5) $750,000 - $1,200,000 As agreed As incurred Outside suppliers
Signage $40,000 - $70,000 As agreed As incurred Outside suppliers
Opening inventory(6) $50,000 - $73,000 Lump sum Before opening Outside suppliers
and Us
Small wares $23,000 - $30,000 As agreed Before opening Outside suppliers
and Us
Pre-Opening Labor &
Training Expenses
(7)
$80,000 - $90,000 As incurred As incurred Third parties
Insurance(8) $5,000 - $8,000 As incurred As incurred Insurance carriers
and agents
Furniture(11) $75,000 - $105,000 As agreed Before opening Outside suppliers
POS system $30,000 - $50,000 As incurred As incurred Third parties
Audio visual equipment $40,000 - $80,000 As incurred As incurred Third parties
Misc. opening costs(10) $13,000 - $15,500 As incurred As incurred Third parties
Additional funds - 3 months(11) $50,000 As incurred As incurred Third parties
Total Estimated Initial Investment (including real estate lease costs for 1 month)*(12) $1,608,500 - $2,370,500
>Return To Top< *Except for the initial franchise fee deposit paid under the Preliminary Agreement and any unused portions of the artwork package, architectural, and civil engineering fees, no expenditure in the table above is refundable.
  1. We describe the initial franchise, artwork package, and architectural fees in Item 5.
  2. The architectural fee covers the cost of third-party architect(s) and/or engineer(s) we select and you hire to prepare the Restaurant's architectural and site plans.
  3. You may lease or buy the Restaurant's premises. The table above describes the costs associated with obtaining and developing leased premises for the Restaurant. The table below describes the costs associated with buying the real estate upon which you will construct a new building for the Restaurant. The Restaurant typically is a free standing unit or in a strip mall in a commercial area. It is approximately 4,000 to 6,000 square feet. The Restaurant's size will depend on many factors, including the ability to place coolers and freezers outside the Restaurant and the number of seats we require. If you lease the premises, rent and security deposit depend on the site's size, condition, and location and the demand for the site among prospective lessees. This estimate reflects a possible 1-month range for rent and security deposit, but your rent and security deposit could be higher depending on the site's particular characteristics, especially if it is in a large metropolitan area. A "Shell Premises" means the unfinished retail space typically provided by a landlord when leasing the premises.
  4. You may lease or buy the Restaurant's premises. The Restaurant typically is in a commercial area. The first table in this Item 7 describes the costs associated with obtaining and developing leased premises for the Restaurant. The table immediately above describes the costs associated with buying the real estate upon which you will construct a new building for the Restaurant. Real estate costs depend on location, size, visibility, economic conditions, accessibility, competitive market conditions, and the type of ownership interest you are buying. Because of numerous variables affecting real estate acquisition costs (for example, financing costs and down-payment), this estimated initial investment might not reflect the total costs of buying real estate and constructing a building suitable for the Restaurant. Property should have excellent visibility from a main road, a minimum of one acre, and no restriction preventing development of the Restaurant as a full-service restaurant with liquor sales.
  5. Site work typically includes storm water drainage, water retention, grading, and parking lot. The cost of the Restaurant's site work will depend on the extent of the remediation required for the site to become pad ready.
  6. Building construction includes costs associated with slab, foundation, frame, plumbing, electrical, mechanical, interior walls and finishes, millwork and ceiling.
  7. Required equipment includes ovens, sinks, stoves, dishwasher, freezer, slicers, cooler, water heaters, and ice makers.
  8. You must have an adequate opening supply of food and beverage products, small kitchenwares, cleaning, paper and packaging supplies, beverage cups and lids, report forms, and marketing materials. You may buy these items from us or independent suppliers.
  9. This covers travel and car rental expenses, hotel and food rates, and compensation for your principals and employees during training.
  10. Premiums for your Restaurant's insurance coverage depend on the insurance company, a state's workers' compensation rates, the fire rating on the Restaurant's structure, the Restaurant's size, and excess or extra coverages you choose. This premium range covers a 1-month period.
  11. Furniture includes tables, booths, chairs, and similar Restaurant items.
  12. These include utility, vendor and sales tax deposits, business licenses, and legal, accounting and organizational costs.
  13. This line-item estimates the funds needed to cover your initial expenses during the first 3 months of operation (other than the items identified separately in the table). These expenses include payroll costs but not any draw or salary for you. However, this is only an estimate, and it is possible that you will need additional working capital during the first 3 months you operate your Restaurant and for a longer time period after that. This 3-month period is not intended, and should not be interpreted, to identify a point at which your Restaurant will break even. We cannot guarantee when or if your Restaurant will break even. Your costs will depend on whether you follow our methods and procedures; your management skill, experience, and business acumen; local economic conditions; the nature of the local market for your products and services; the prevailing wage rate; competition; and your Restaurant's sales during the initial period. We relied on our franchising experience since 1987, and our experience in operating (on and off) Mellow Mushroom restaurants since 1974, to compile this Additional Funds estimate.
  14. You should review these figures carefully with a business advisor before deciding to purchase the franchise. We do not offer financing directly or indirectly for any part of the initial investment. The availability and terms of financing depend on the availability of financing generally, your creditworthiness and collateral, and lending policies of financial institutions from which you request a loan.