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Burger Hut Franchise Cost & Fees

Date Incorporation: 2006

Franchising Since: 2007

Headquarters: California

Description: The franchisee will operate a quick service casual restaurant that offers build your own burgers using freshly ground beef, as well as vegetarian friendly burgers, sandwiches, hot dogs, condiment bar, including our special sauce, fries, onion rings, hand-dipped shakes, freezes, floats, malts, soft drinks and beer under the name "Burger Hut". All menu items are prepared as they are ordered.

Franchise Offer: The franchisor is offering franchises for restaurants that operate under the name "Burger Hut", which are quick service, casual restaurants. The system for Burger Hut restaurants currently includes menus for lunch and dinner.
The franchisor also offers an area development agreement which grants the right to establish and operate a specified number of Burger Hut restaurants in a specified area.

Financial Assistance: No direct or indirect financing is offered by the franchisor nor do they guarantee any note, lease or obligation.

Training and Assistance: The initial training consists of two weeks of training, which is currently held at the franchisor's headquarters in Chico, California, and at one or more Burger Hut restaurants. The training is designed for the franchisee and up to 2 managers.
Two of the franchisor's representatives will assist the franchisee with grand opening supervision and assistance for approximately three weeks. Both representatives will be on-site for the week before opening and the week after opening, and then one of the two representatives will remain at the Burger Hut restaurant for an additional week to supervise cooking procedures and provide any other assistance.

Territory: The franchise agreement will specify the site that will be the approved location for the franchised restaurant. It will also specify a territory. The size and scope of the territory will be determined according to whether the approved location is an urban area or a suburban area.  If the Burger Hut restaurant is located at a non-traditional site, the franchisee will not be granted a territory. During the term of the franchise agreement, the franchisor will not establish or operate, nor license any other person to establish or operate a Burger Hut restaurant in the territory, except as may be permitted under the franchise agreement.

Term of Agreement and Renewal: The term of the franchise agreement is 10 years and can be renewed twice for a 5-year period each.

Obligations and Restrictions: Under the franchise agreement, the franchisee (or if it is an entity, the designated principal, who must own at least a 10% interest in the franchise) must be involved in the general oversight and management of the operations of the franchised restaurant. The designated principal should act as the general manager for the franchised restaurant. The franchisee must at all times maintain a manager who has been certified by the franchisor to manage a Burger Hut restaurant. The franchisee may sell and provide only products and services approved by the franchisor and which conform to their standards and specifications. The franchisee must carry and sell all products approved and specified to be offered by all Burger Hut restaurants, unless otherwise stated. The franchisee may only sell to retail customers at the approved location.

Total Number of Units: 0 units by year end 2007

Total Number of franchises Units: 0 franchised units by year end 2007
4 projected openings for franchised unit for 2008

Investment Tables:

Initial Investment:

Expenditures Low High
Franchise Fee $35,000 $35,000
Leasehold improvements $137,500 $152,500
Furniture and fixture $15,000 $20,000
Equipment and smallwares $112,000 $112,000
Office equipment, safe and supplies $5,000 $7,500
Computer hardware and software $12,000 $15,000
Signage $13,950 $14,500
Business licenses & permits $1,600 $1,920
Professional fees $7,500 $10,000
Rent per month $6,250 $6,250
Initial inventory of food and paper supplies $9,000 $11,000
Lease & utility security deposits $19,750 $20,750
Insurance $3,500 $7,000
Grand opening advertising $5,000 $7,500
Training expenses $11,942 $15,695
Uniforms $1,677 $2,012
Additional funds (initial period of operations $33,665 $42,081
Total $424,084 $474,458

 

Ongoing fees:

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Name of fee Amount
Royalty fee 5% of gross sales
Advertising fund Up to 2% of gross sales
Local advertising 2% of gross sales
Local telephone and on-line directories Varies
Initial training program – additional trainees $200 per trainee per day
$70 - $100 per month
Restaurant refurbishment Varies

 

The above information has been taken from the UFOC/FDD of Burger Hut

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