Einstein Bros. Bagels Franchise Costs, Fees & FDD

Year Business Began: 1995

Franchising Since: 2006

Headquarters: Denver, Colorado

Estimated Number of Units: 700

Franchise Description: Einstein Bros. Bagels Franchise Corporation is the franchisor. The corporate parent company is Einstein Noah Restaurant Group, Inc. Franchisees operate a business that specializes in the sale of fresh-baked bagels, cream cheese and other spreads, specialty coffees and teas, baked sweets and snacks, and creative lunch items, among other things.
Training Overview: Under the Franchise Agreement, if franchisees are a corporation, partnership, limited liability company, or limited liability partnership, they must designate one of their principals with an ownership interest and who the franchisor has previously approved to supervise the operation of the restaurant as an “operating partner.” Before franchisees open their restaurant, they or their operating partner, and up to one additional one full-time general manager responsible for the day to day operation of the franchise (the store manager) or additional manager must attend and successfully complete, to the franchisor’s satisfaction, the initial training program it offers. Under the License Agreement, before they open the restaurant, at least two individuals must attend and successfully complete, to the franchisor’s satisfaction, the initial training program offered. Franchise training will be conducted over an approximately four-week period at training restaurants of the franchisor’s choosing across the U.S. Licensee training will be conducted over an approximately six-day period at the franchisor’s headquarters in Denver, Colorado, or at a designated training store. In addition to attending the initial training program, the certified managers must obtain such food service safety certifications, such as “ServSafe,” that the franchisor periodically designates. If franchisees ask that the franchisor provide additional on-site training, and it is able to do so, then they will pay $350 per person to be trained per day plus the then-current per diem charges and out-of-pocket expenses.

Territory Granted: During the term of the Franchise Agreement, so long as franchisees remain in compliance with the terms of the Franchise Agreement, the franchisor will not establish or franchise anyone else to establish, another Einstein Bros. restaurant at any location within the “protected territory” that is designated in the Franchise Agreement (except as noted in the FDD with respect to “non-traditional facilities” or “captive market locations”). The protected territory will typically be a circle, the center of which will be the front door of the restaurant, and that circle will have a radius that is specified in the Franchise Agreement (two miles, except in dense urban centers, where it could be less). Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that it controls. The franchisor does not grant franchisees a protected territory or similar rights under the License Agreement.

Obligations and Restrictions: The Franchise Agreement and License Agreement do not require franchisees to participate personally in the direct operation of the restaurant, although the franchisor encourages and recommends active participation by franchisees. The franchisor does, however, require that franchisees and/or their certified manager(s) devote full time, energy, and best efforts to the management of the restaurant. Franchisees may sell and provide only products and services that conform to the franchisor’s standards and specifications. Franchisees also will have certain obligations to offer for sale particular items.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years under the Franchise Agreement from the date the Restaurant opens, or 11 years from the effective date of the agreement. The term under the License Agreement is five years from the effective date of the agreement, and 10 years for all airport locations. If requirements are met, renewal of the Franchise Agreement is for one additional 10-year term, two additional five-year terms for the License Agreement, and one additional 10-year term for airport locations.

Financial Assistance: Neither the franchisor nor any agent or affiliate offers direct or indirect financing to franchisees, guarantees any note, lease or obligation of franchisees.

Estimated Initial Investment

Franchised Restaurant

Name of Fee	Low	High
Construction Costs	$240,000	$515,000
Computer Equipment & Electronics	$25,000	$40,000
Furniture, Fixtures & Equipment	$150,000	$225,000
Signage & Graphics	$25,000	$60,000
Professional Fees (incl. architectural or engineering fees and permit and impact fees)	$28,000	$45,000
Initial Franchise Fee	$35,000	$35,000
Design Review Fee	$2,000	$2,000
Opening Inventory, Smallwares and Supplies	$16,000	$25,000
Initial Marketing and Promotion	$2,500	$8,000
Insurance	$7,500	$15,000
Training Expenses	$1,000	$14,000
Miscellaneous Opening Costs	$1,000	$2,500
Business Licenses	$1,000	$1,500
Security Deposits	$1,000	$2,500
Additional Funds (three months)	$20,000	$40,000
ESTIMATED TOTAL	$555,000	$1,030,500

 
Licensed Restaurant

Name of Fee	Low	High
Construction Costs	$25,000	$250,000
Furniture, Fixtures & Equipment	$50,000	$200,000
Signage & Graphics	$8,000	$15,000
Initial Franchise Fee	$10,000	$12,500
Opening Inventory, Smallwares and Supplies	$15,000	$25,000
Initial Marketing and Promotion	$2,500	$2,500
Insurance	$2,500	$3,500
Training Expenses	$2,500	$6,000
Miscellaneous Opening Costs	$1,000	$2,000
Business Licenses	$500	$5,000
Security Deposits	$800	$3,750
Additional Funds (three months)	$20,750	$95,000
ESTIMATED TOTAL	$138,550	$620,250

 
Other Fees

Type of Fee	Amount
Royalty	5% of gross sales under the Franchise Agreement; 6.5% of gross sales under the License Agreement (reduced to 4% of gross sales for airport locations).
Marketing Contribution	4% of gross sales under the Franchise Agreement.
Grand Opening Marketing Program	$10,000 under the Franchise Agreement.
Transfer Fee	50% of the then-current initial fee.
Interest on Overdue Amounts	1.5% per month on the underpayment.
Late Fee (License Agreement only)	15% of amount due, plus any bank charges.
Costs and Attorneys’ Fees	Will vary under circumstances.
Supplier Testing	Will vary.
Audit Costs	All costs and expenses associated with the audit, reasonable accounting and legal costs.
Indemnity	Will vary under circumstances.
Reinspection Fee (License Agreement only)	An amount not to exceed $1,500.
Securities Offering Fee	Under the Franchise Agreement, $7,500 or the franchisor’s actual expenses, whichever is more.
Additional Training and Onsite Assistance	$350 per trainer per day, plus the franchisor’s per-diem charges and the franchisor’s out-of-pocket costs.
Additional and Replacement Certified Manager Personnel Training	$1,600 under the Franchise Agreement, and $850 under the License Agreement, for each additional individual to be trained; The franchisor’s personnel's wages, per diem charges, and travel, hotel, and living expenses under the License Agreement.
Renewal Fee	Franchise Agreement: 10% of the then-current initial franchise fee; License Agreement: 10% of the then-current initial license fee, or $1,250, whichever is more.
Lost Future Royalties	Will vary, but is calculated based on the average of the franchisee’s monthly royalty fees for the previous 12 months, multiplied by the lesser of 36 or the number of months remaining in the Franchise Agreement.
System Support Fees for Subscription-Based System	$500 - $1,100 per month.

The above information has been compiled from the FDD of Einstein Bros. Bagels. Year of FDD: 2025.
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