Sometimes, those of us in the franchise world take for granted that everyone knows what the acronym, FDD, stands for. If you’re new to franchising opportunities, you may not know that FDD stands for Franchise Disclosure Document, which is a legal document1 that must be given to anyone who is interested in buying a U.S. franchise before a sale is completed. The FDD is intended to help you make an informed decision about buying your own fresh restaurant franchise (or any franchise.) Transparency is something we take very seriously at Baja Fresh Mexican Grill™, so read on and we’ll explain some of the important highlights of the Baja Fresh FDD.
Fees and Financing
Every FDD has 23 sections, or “items,” covering everything from the franchisor’s prior business experience, to fees, financing, and the franchisee’s obligations as a franchise owner. Most people are particularly interested in the sections that explain how much it will cost, on average, to open and manage a fresh restaurant franchise like Baja Fresh.
Baja Fresh offers two different types of restaurant options, a “traditional” restaurant and a smaller non-traditional “express” restaurant format. Your upfront and recurring costs and fees will vary depending on which option you choose, but you’ll find all the information you need about costs in Items 5, 6, and 7 of our FDD. Here, you will also find information about our discounts for U.S. veterans, and other federally recognized 501 (c) (3) organizations.
All that said, you should expect to pay anywhere between $229,200 and $994,290 to begin operations of your Baja Fresh restaurant franchise, depending on the style and location, including the initial fees.
Franchisor’s Assistance
Item 11 of the FDD outlines the numerous benefits and support you will receive from the moment you become a Baja Fresh franchisee. Our obligations to our franchisees begin with helping them find a location and obtain necessary approvals. Once that’s done, we’ll specify building and construction requirements, identify the furnishings, fixtures and equipment you’ll need, and even provide the names of suppliers and distributors you’ll want to contact. This is when being a franchise owner instead of a sole independent proprietor can really start to pay off!
Item 11 also describes operational support, including extensive training, marketing and advertising support, and technical support such as software we may recommend from time to time to help with administrative tasks. Additionally, you’ll find information about our Operations Manual — 237 pages of policies and operating procedures that is supplied once you sign your franchise agreement — to help you comply with our brand standards and production methods.
Financial Performance Representations
Item 19 – Financial Performance Representations – is another section of the FDD that gets a lot of attention from prospective franchisees. In it, the franchisor provides information about the actual or potential financial performance of its restaurants, based on historical data from other franchisees. Baja Fresh reports statistics about average and median gross sales based on the performance of all Baja Fresh franchised stores in the U.S. that were open for at least 12 consecutive months during a specific time period. While we can’t guarantee or forecast gross sales for a new Baja Fresh restaurant franchise, we can, and do, share information to help you make an informed investment decision.
The Baja Fresh financial disclosure document summarizes key provisions of our franchise agreement in plain English. We know that deciding on whether or not to buy a franchise is an important consideration. Our FDD can be an indispensable part of your fresh restaurant franchise discovery process.
If you’re ready to learn more about the Baja Fresh Mexican Grill investment opportunity, please contact us today.
*For detailed information on all items discussed within this post, please see the current Baja Fresh FDD and speak with a development team member
External Resources:
Kenton, Will. “Franchise Disclosure Document.” Investopedia. Investopedia, January 29, 2020. https://www.investopedia.com/terms/f/franchise-disclosure-document.asp.
