So if they’re around 30 cents at cost and 3.19 at sale, that’s about 11X markup to account for OH, G&A, and profit
Depending on the location of the restaurant, OH can be to to 400%, they have to pay a franchise fee, 45K a year, which is not significant compared to sales, but let’s its 5% of sales, that means that around 6X of the markup is profit
They can just lower their expectation of profit and still be more than ok
So if they’re around 30 cents at cost and 3.19 at sale, that’s about 11X markup to account for OH, G&A, and profit
Depending on the location of the restaurant, OH can be to to 400%, they have to pay a franchise fee, 45K a year, which is not significant compared to sales, but let’s its 5% of sales, that means that around 6X of the markup is profit
They can just lower their expectation of profit and still be more than ok
The $45K is a one time fee, after that there’s monthly rent, which significantly varies by site
Rent is included in OH