(1) The Initial Franchise Fee is $50,000 for your first, second and third Angry Crab Shacks. The Initial Franchise Fee for your fourth and each subsequent Angry Crab Shack is $40,000. The Initial Franchise Fee will be $40,000 beginning with your first Angry Crab Shack if you are a veteran of the United States military (having been honorably discharged from the U.S. armed forces) or a current or former firefighter or police officer. The Initial Franchise Fee is non-refundable. The Initial Franchise Fee includes the training expenses for three (3) individuals. There is a charge of $1,500 per additional person attending the Initial Training Program.
(2) You may execute a Development Agreement at the same time that you execute a Franchise Agreement. In the Development Agreement, Franchisee agrees to open and operate additional Angry Crab Shacks within the Development Area in compliance with the Development Schedule. The applicable Option Fee will be applied to the applicable Initial Franchise Fee, upon execution of a franchise agreement for your additional Angry Crab Shack. The Option Fee is non-refundable. If you and we agree to grant you franchise and development rights in excess of three (3) Angry Crab Shacks, the Option Fee may be greater than the estimated amount. If you are a veteran of the United State military (having been honorably discharged from the U.S. armed forces) or a current or former firefighter or police officer, the Option Fee may be lower.
(3) If you do not own a suitable location, you must lease or purchase the premises for your Angry Crab Shack. If you lease the premises, the property owner or sub-landlord will generally require a security deposit, the amount of which generally ranges from one month of monthly rent to six months of monthly rent. The amount of your security deposit will vary according to your area, the type of location (street location, enclosed mall, strip center, or free-standing building), and various other factors. A lease security deposit may be non-refundable and is paid directly to the property owner of the premises. In addition, in certain lease transactions, the property owner may require you, or if you are a corporation, partnership, limited liability company, or other legal entity, you and your owners, to personally guarantee the lease. If you decide to purchase land and construct your own building or buy an existing building, you can expect to add the cost of the real estate to the total investment indicated in this Item 7 of the Disclosure Document. Real estate costs vary considerably depending on fair market values in your area; size, condition, and location of the premises; and municipal requirements. Construction costs also vary considerably depending on fair market values in your area; size, condition, and location of the premises; labor costs (union versus non-union); and equipment requirements. The square footage generally needed to establish an Angry Crab Shack is between 5500 and 8,000 square feet. This breakdown includes approximately 3,000 square feet of dining space, 1,500-3,500 of kitchen / commissary space, and 1,000-1,500 of bar space. The probable locations for an Angry Crab Shack are a street location, enclosed mall, strip center, or free-standing building with dense residential and strong daytime working populations.
(4) The broker’s fee is typically 3% of the total lease amount and is estimated to be between $5,000 and $15,000 but all or part of the real estate broker’s fee is typically paid by the Landlord.
(5) You must pay the travel and living expenses for three (3) people to attend our training program in Mesa, Arizona. Your travel and living expenses will include airfare, hotel, and food for approximately two (2) weeks. This amount may be significantly higher if you reside in certain remote areas or if you and we agree that you may bring more than three (3) people through the training program.
(6) This amount includes estimated costs of furniture, furnishings, installations, equipment, trade fixtures, and certain other items on your Angry Crab Shack premises, the amount and specific items of which will vary depending upon the location, size, and condition of a particular restaurant. You must purchase restaurant equipment for your Angry Crab Shack from approved vendors and according to our specifications. The list of approved vendors is included in our Confidential Operations Manual. The Landlord may provide some leasehold improvements, but if not, they will be at your expense. The total amount of leasehold improvements for your Angry Crab Shack will vary greatly, depending on the type of premises for your Angry Crab Shack, condition of the premises, and what improvements you require. You must use approved third party architects and project management firms for the design and construction oversight of your Angry Crab Shack. In addition, you must use an approved third party contractors for the construction of your Angry Crab Shack. The list of and/or criteria for approved architects, engineers, and contractors is included in the Confidential Operations Manual.
(7) You will need to a commissary kitchen for the delivery, storage, and preparation of food products to be delivered to each of your Angry Crab Shacks. You will need approximately 1,200-1,500 square feet to house a commissary kitchen. The commissary kitchen may be housed in one of your Angry Crab Shacks, in each of your Angry Crab Shacks, or in a separate building or structure developed to house a commissary kitchen. This Item 7 includes the estimated cost to build one (1) commissary kitchen. If you decide to build a commissary kitchen at each of your locations, something that you are not required to do, your costs may be significantly higher.
(8) As with any retail business, you will purchase inventory continuously as long as you operate your Angry Crab Shack. This figure only represents an estimate of the initial inventory you will be required to purchase in opening your Angry Crab Shack.
(9) You must provide liability insurance equal to or greater than the following minimum insurance coverage requirements for each of your Angry Crab Shacks.