Franchise Pub Startup Costs and Profit Calculation
Hello. Today, let's take a detailed look at the initial costs and expected profits for starting a franchise pub.
Initial Costs
Starting a franchise pub can require a significant initial investment. Let's calculate these costs:
- Franchise Fee: 7,000,000 KRW
- Training Fee: 3,000,000 KRW
- Contract Performance Deposit: 2,000,000 KRW
- Interior Design: 47,000,000 KRW (based on a 25-square-meter space)
- Signboard: 10,500,000 KRW
- Kitchen Equipment: 19,000,000 KRW
- Furniture and Tables: 13,000,000 KRW
With these expenses, the initial startup cost would be approximately 101,500,000 KRW. Please note that value-added tax (VAT) and additional construction costs are not included in this estimate.
Monthly Average Revenue
The monthly average revenue for a franchise pub can vary depending on the location and the size of the establishment. Let's calculate the average revenue:
- Annual Average Revenue: 325,187,000 KRW
- Monthly Average Revenue: 325,187,000 KRW / 12 = 27,098,916 KRW (approximately 27,100,000 KRW)
This revenue figure is an average for all franchise locations nationwide and may vary based on the actual location and size of the establishment.
Monthly Average Expenses
To effectively manage revenue, it's essential to calculate monthly average expenses. Here are the expected expense items:
- Cost of Goods Sold (COGS): 35% of revenue = 27,100,000 KRW * 0.35 = 9,485,500 KRW
- Labor Costs (3 part-time employees): Approximately 8,422,500 KRW (calculated as 8 hours * 30.4 days * 11,544 KRW)
- Rent: 3,000,000 KRW
- Credit Card Processing Fees: 1.1% of revenue = 297,000 KRW
- Utility Bills (water and electricity): Varies by establishment size (estimated at 810,000 KRW)
- Royalties: 6% of revenue = 1,620,000 KRW
As a result of these expenses, the monthly average net profit can be calculated as follows:
- Revenue - Expenses = 27,100,000 KRW - (9,485,500 KRW + 8,422,500 KRW + 3,000,000 KRW + 297,000 KRW + 810,000 KRW + 1,620,000 KRW) = 3,400,498 KRW
Therefore, the estimated monthly average net profit is approximately 3,400,000 KRW.
Conclusion
Starting a franchise pub involves a substantial initial investment, and the expected revenue and profit can vary based on location and competition. It's crucial to consider these factors when making a decision. Franchise pubs may not always offer high returns on investment, and factors such as local competition and the increasing number of franchise locations should be taken into account. Always make informed decisions and gather sufficient information about the market and the brand that suits you best. I hope this information is helpful. Thank you.
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