An overview of the operating costs of the Captain D franchise

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Introduction

The restaurant business is one of the most competitive and difficult industries to operate. According to the Bureau of Labor Statistics, the food service industry employs over 14.8 million people and has an estimated total of one million restaurants across the United States alone. Despite tough competition, franchise owners have managed to succeed in the restaurant space, and restaurant science indicates that the top 500 restaurant chains have grown revenue at more than 4% annually for the past three years.

Operating a franchise comes with its own unique set of operational costs and Captain D is no different. In this blog post, we will explore franchise operating costs associated with help captains to help potential franchisees better understand the costs associated with opening and running a franchise business.

Operating Expenses

As with any business, when purchasing a Captain D franchise, there are a variety of operating expenses that need to be considered. These operating expenses will depend on the size and location of the franchise, but will include the following:

  • Real Estate and Rental/Rent
  • Furniture, Fixtures and Equipment (FF&E)
  • Public services
  • Payroll and benefits
  • External services
  • food ingredients
  • Advertising Marketing
  • Maintenance and repairs
  • Assurance

Real Estate and Lease/Rent;

For a Captain D franchise owner looking to open a restaurant, the two main costs that need to be considered are real estate fees and rental/lease expenses. The cost of real estate can vary greatly depending on the location, size and quality of the building. Additionally, the cost of lease/rent often changes depending on the landlord and the local market. Both of these considerations can be costly for Captain D’s franchise potentials.

In the United States, the average cost of buying commercial real estate has steadily increased. According to National Real Estate Investor, commercial real estate prices rose nearly 4% year-on-year in 2019, with the median selling price hitting a high of 0 per square foot. In some of the country’s hottest markets, commercial real estate has become increasingly expensive, with the median sale price in some cities reaching 2 per square foot in San Francisco.

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In terms of rent or lease, the National Retail Federation estimates that the average location rent is between and per square foot or about 4-7% of a store’s expected annual gross sales. This cost can fluctuate dramatically depending on the size of the location, the quality of the installation and the strength of the local market.

Therefore, it is important for potential Captain D franchisees to factor real estate fees and rental/lease costs into their startup budget when opening a new restaurant. Taking the time to shop around, negotiate, and research the best possible terms can end up saving considerable amounts of money in the long run.

Furniture Threads and Equipment (FF&E)

When considering becoming a Captain D franchise, it is important to understand furniture and equipment (FF&E) fees, in addition to franchise fees. According to Captain D, FF&E costs are approximately ,000-5,000 . This is a significant investment for any potential franchisee, and understanding what is included in this cost is essential.

FF&E costs include items such as kitchen equipment, store fixtures, office furniture, indoor/outdoor signage, safety/security equipment, and hardware and software. Additionally, the equipment must meet certain standards required by the company, as well as state and local regulations.

FF&E expenses also include the facilities needed to make these items work in the restaurant space, such as electrical wiring, exhaust hoods, and ventilation systems. This alone might require additional expense, depending on the location of the restaurant.

It is also important to note that to keep the restaurant running, there are ongoing costs associated with routine upkeep, servicing and replacement of FF&E. These include equipment repairs/replacements; replacement of broken furniture or fixtures; as well as service contracts or upgrades to ensure the ongoing safety and security of the restaurant.

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Public services

When planning to open a Captain D franchise, you need to consider the costs associated with utilities. Every business needs utilities such as electricity, water and gas in order to operate. According to recent statistics, the average monthly utility cost for a franchise captain’s facility operates approximately 5.11 USD per month.

There may also be additional upfront costs to establish and maintain utility lines. These additional costs can vary from 0 – 00 depending on the location of the business and the existing infrastructure.

When calculating general operating costs, you should plan for a relatively consistent monthly outlay on the following types of utilities:

  • Electricity
  • Gas
  • Water
  • Garbage can
  • Recycling services

Utilities are necessary to keep a business running smoothly, but they also take up a large portion of budget allocations. As such, it’s important to factor these costs into your budget estimates when deciding whether or not to open a State Captain franchise.

Payroll and Benefits;

Operating costs for a Captain D franchise vary widely based on several variables such as location, business model and other factors. One of the biggest costs associated with running a Captain D franchise is payroll and benefits.

According to the most recent statistical data, the estimated payroll and benefits cost for 2019 was 0,000 . This figure can vary depending on the number of employees, salaries and benefits of the franchise. Employees are the biggest expense for any business and the key to any successful business is having loyal, hardworking employees who are offered competitive wages and benefits.

The average cost of benefits for the Captain D franchise may include paid parental leave, insurance, pension, health benefits, disability, and other forms of benefits. Franchisees are responsible for providing these benefits to employees, as stipulated in their employee employment contract.

Payroll and benefits are ongoing costs for a Captain D franchise, so it’s important to budget for these costs regularly and include these costs in a franchise’s total operating budget.

External services

Opening a Captain D franchise can be an attractive option for aspiring entrepreneurs; However, it is important to understand the various costs associated with running a successful business. Expenses associated with running a Captain D franchise include specialized equipment, facility costs, and outside services. Outside services refer to all required services that are not part of the traditional business operation, such as accounting and legal services.

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In 2020, the average outside service cost for a Captain D franchise was ,781. However, this number is subject to change depending on the scope of services required by the franchise owner. Services may include legal and accounting fees, consulting services, bank charges, software licenses and taxes. Depending on the different services required, the total cost of outside services can vary significantly between restaurants.

Additionally, any unexpected services required to maintain business operations can also impact the overall cost of running a facility captain franchise. Experienced franchisees can weigh the value associated with outside services before signing a contract with a specific accounting or law firm. Before entering into a contract or purchase, the franchisee should review the legal requirements and applicable terms.

Estimating the cost of outside services can help potential franchisees identify start-up and annual expenses associated with the business. Prospective owners should do their due diligence in researching estimated costs and potential fees when entering the journey of starting their own Captain D business.

food ingredients;

When considering a Captain D franchise, potential franchisees should be aware of the associated food and ingredient costs. The cost of food and ingredients needed to run the business can range from ,000 to ,000 per year , depending on the size of the restaurant, the suppliers used, and the type of food purchased. This includes the cost of supplies such as flour, produce, and other items used in food production.

In 2020, the restaurant industry spent an estimated trillion on food and ingredients Worldwide – Up 8.5 billion from the previous year. Industry spending on food and ingredients alone accounted for almost 45% of total sales. This is an indication that Captain D franchise owners should be prepared to spend a significant portion of their budget on food and ingredients.

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When it comes to ingredients, some of the more common items a Buy Captain’s Franchise may purchase include eggs, butter, cheese, flour, vegetable oil, and spices. The average cost of these items in the United States is around .90 per pound . If the restaurant is looking to buy organic ingredients, the cost may be about 20% more expensive.

Additionally, there are additional costs associated with food and ingredients, such as packaging, shipping, storage, and labor. These costs can vary depending on the size of the restaurant, the suppliers used and the types of food purchased. For example, a buying captain franchise that buys seafood will likely have different costs than one that only buys produce.

Therefore, when estimating the cost of running a Captain D franchise, it is important to consider the cost of food and ingredients used in food preparation. With careful planning and monitoring, these expenses can be kept to a manageable amount and will ultimately have a positive effect on the overall success of the business.

Advertising Marketing

When it comes to marketing and advertising a Captain D’s restaurant, it’s important to plan and budget appropriately. According to a 2018 franchise disclosure document, initial franchisees must contribute 2% of the calculated average gross sales volume to be used for advertising each month. For existing franchises, the required contribution is 0.5%. In the same document, it is estimated that a franchisee operating a restaurant could pay up to 2,500 for marketing and advertising expenses in the first year, including FDD fees. This figure does not include local store marketing or costs associated with individual promotional activities.

In addition to standard marketing and advertising fees, Captain D also encourages franchisees to engage in local store marketing initiatives. These may include radio and television advertisements, display advertisements, flyers, coupons, publication pieces and other marketing methods. Some of these activities require additional financial investment and are not covered by the general advertising budget.

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For those looking to maximize their marketing and advertising efforts, Captain D’s website hosts a stocked media library with brand assets and logos that can be used for marketing materials, as well as advertisements and graphics. pre-designed for various digital channels. Additionally, there are a variety of partnership marketing programs available, such as collaborations with third-party delivery companies, kiosk providers, and loyalty programs.

Maintenance and repairs;

When it comes to a franchise like Captain D, maintenance and repair costs shouldn’t be overlooked. As a franchisee, you will be responsible for ensuring that the restaurant runs smoothly, which includes following up on necessary repairs and maintenance. According to recent statistical information from Statista, the average spend rates for franchise operators in the United States in 2018 totaled .6 billion in USD. This explains both the costs associated with the purchase of new equipment and with maintenance and repairs.

When considering the cost associated with maintenance and repairs, it is important to keep in mind that the cost of repairs, such as replacing equipment, can vary significantly depending on the size and the complexity of the equipment. It is also important to consider all maintenance points, from servicing, inspections and calibrations to predictable and predictive maintenance.

In addition to the costs of repairs and maintenance, franchisees of original captains will also incur expenses related to upgrades and modifications to existing facilities. Taking the time to do this kind of maintenance can help a franchise become more efficient in the long run and can save them a lot of money over time.

Assurance

When researching the costs of operating a franchise captain’s establishment, insurance must be taken into consideration. Typically, the business owner is required to secure the types of insurance and levels of coverage needed for the deductible. This can include general liability insurance, workers’ compensation, property and casualty insurance, and product liability insurance, to name a few. It is essential to thoroughly research a franchise’s exposures and requirements before purchase to ensure that all appropriate insurance is in place.

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An insurance agent or broker should be consulted as early as possible when opening a franchise. It is also important to remember that insurance premiums can vary greatly by region and an agent must be licensed in the state in which the franchise is located in order to sell the necessary coverage. For example, the cost of workers’ compensation can exceed ,000 per year in some states depending on payroll and industry.

Also, while the upfront costs of insurance can be expensive, the cost of uninsured losses can be catastrophic and worse, can easily put a franchise out of business. Current US statistics show that the cost of commercial insurance for small and medium businesses averaged ,000 in 2019. For Quick Service Restaurants (QSRs), this figure averages ,000 per year for insurance costs.

Conclusion

Captain D is a great option for foodservice entrepreneurs, whether you’re opening a new store or franchise location, buying an existing store or franchise, or taking an interest in a royalty partnership. The initial investment is reasonable, cost and franchise fees are easily covered by returns and profits, and franchising with Captain D gives you access to an award-winning support team.

When budgeting for a Captain D franchise, prospective business owners should anticipate operating costs in the following areas: real estate and lease/rent; Furniture, Fixtures and Equipment (FF&E); Public services; Payroll and Benefits; External services; food ingredients; Advertising Marketing; Maintenance and repairs; Assurance. Generally, start-up costs can range from 0,000 to ,200,000, while the typical franchise royalty fee is 4% of sales.

The key to successfully managing franchise costs is to keep careful track of expenses, only offer the highest quality supplies and materials, and seek out the best deals on equipment and other essential supplies. By staying on top of franchise expenses, franchisees can maximize profits and enjoy the benefits of owning a Captain D franchise.