# Cost per square foot

Dividing an Item 7 total by square footage is a way to see that two ranges
describe different projects. It is not a way to bid a restaurant. The
numerator is a low-to-high opening-investment estimate that includes fees,
deposits, equipment, inventory, and working capital. The denominator is a
low-to-high footprint. Four combinations are possible, and none of them is
the contractor's number for the room under lease.

This chapter uses only brands that disclose both an Item 7 range and a
square-footage range. Wienerschnitzel has neither Item 7 nor a footprint in
this dataset. The Halal Guys, Dog Haus, Crave Hot Dogs and BBQ, Pepper Lunch,
and Capriotti's have Item 7 totals in the directory and no square-footage
field on the brand record, so they are omitted here.

## The arithmetic, shown rather than summarized

For each brand, four implied dollars-per-square-foot figures exist:

- low total ÷ large footprint (the smallest implied $/sq ft)
- low total ÷ small footprint
- high total ÷ large footprint
- high total ÷ small footprint (the largest implied $/sq ft)

| Brand | Sq ft | Item 7 | Low ÷ large | Low ÷ small | High ÷ large | High ÷ small |
| --- | --- | --- | ---: | ---: | ---: | ---: |
| German Doner Kebab | 1,200–1,400 | $690,500–$1,123,000 | $493 | $575 | $802 | $936 |
| Shah's Halal Food | 1,200–2,000 | $197,000–$405,000 | $99 | $164 | $203 | $338 |
| The Great Greek | 1,800–2,000 | $582,014–$1,088,560 | $291 | $323 | $544 | $605 |
| Mad for Chicken | 2,000–4,000 | $320,125–$687,700 | $80 | $160 | $172 | $344 |
| 375° Chicken 'n Fries | 800–1,500 | $324,100–$521,500 | $216 | $405 | $348 | $652 |
| Döner Haus | 700–1,200 | $359,500–$586,000 | $300 | $514 | $488 | $837 |

The dollars are rounded to the nearest dollar after dividing the filing's
totals by the endpoints of the published footprint. GDK's $690,500 ÷ 1,400 =
$493.21, shown as $493. Döner Haus's $359,500 ÷ 1,200 = $299.58, shown as
$300. No line-item split sits behind the Döner Haus row; the issued range is
the whole numerator.

Mad for Chicken's $80 (low total on 4,000 square feet) and GDK's $936 (high
total on 1,200 square feet) are both “Item 7 per square foot.” They are not
two bids for comparable rooms. Mad for Chicken's 2024 table is a 2,000–4,000
square-foot full restaurant at $320,125–$687,700. GDK's 2024 table is a
1,200–1,400 square-foot outlet inside a five-outlet minimum at
$690,500–$1,123,000. The formats, filing years, and included rows differ
before anyone divides.

## Why the numerator is the wrong kind of cost

Item 7 is an opening-investment estimate. The FTC's [Franchise Rule compliance
guide](https://www.ftc.gov/system/files/documents/plain-language/bus70-franchise-rule-compliance-guide.pdf)
includes amounts paid to establish the business and additional expenses
through the initial period. A contractor bids work in the premises. Those are
different objects.

GDK's $1,123,000 high includes a $30,000 franchise fee, $25,000–$30,000 of
deposits, $15,000–$20,000 of additional funds, $15,000–$20,000 of opening
inventory, and $10,000–$15,000 of pre-launch marketing. None of that is
flooring. Dividing the whole high by 1,200 square feet and calling the result
a construction unit cost attributes fees and working capital to the slab.

Construction-only division is still not a bid, but it is a less mixed
numerator for the brands that itemise it:

| Brand | Construction-bucket range | Construction ÷ large sq ft (low–high) | Construction ÷ small sq ft (low–high) |
| --- | --- | --- | --- |
| German Doner Kebab | $355,000–$680,000 | $254–$486 | $296–$567 |
| Shah's Halal Food | $80,000–$160,000 | $40–$80 | $67–$133 |
| The Great Greek | $260,000–$660,000 | $130–$330 | $144–$367 |
| Mad for Chicken | $85,000–$255,000 | $21–$64 | $43–$128 |
| 375° Chicken 'n Fries | $108,000–$212,000 | $72–$141 | $135–$265 |

Shah's $40–$80 of construction per large-footprint square foot is the
conversion-shaped band. Great Greek's $130–$367 spans a design fee plus
leasehold improvements of $250,000–$650,000. GDK's construction unit costs
stay high even at the low end because mechanical, electrical, and plumbing
($150,000–$175,000) and fit-out ($175,000–$205,000) do not go to zero when
leasehold improvements do. Döner Haus has no construction row here, so it
cannot appear in this second table.

A contractor will still bid from drawings, existing conditions, and the
authority having jurisdiction — not from $254 per square foot derived from a
2024 FDD.

## Footprint endpoints are not the room

Square-footage ranges in these filings are typical-outlet statements, not
measured areas of a leased premises. GDK's 1,200–1,400, Shah's 1,200–2,000,
Great Greek's 1,800–2,000, Mad for Chicken's 2,000–4,000, 375°'s 800–1,500,
and Döner Haus's 700–1,200 are format descriptions. Rentable area, usable
area, and kitchen area are different measurements. A 1,350 square-foot
GDK-shaped shop with a 400 square-foot back of house is not “the midpoint.”

Mad for Chicken's express format of $242,500–$466,700 is a second Item 7, not
a second square-footage field in this dataset. Dividing the express total by
the full-restaurant 2,000–4,000 square feet would mix two offerings. This
page does not.

## Worked example: 375° versus GDK

375°'s high total of $521,500 on 800 square feet implies $652 per square foot.
GDK's low total of $690,500 on 1,400 square feet implies $493 per square foot.
A ranking that says “375° is more expensive per foot” has compared a small
outlet's high end on its small footprint with a larger outlet's low end on
its large footprint, across two 2024 filings with different row structures.
375° itemises FF&E at $100,000–$120,000 and construction-bucket costs at
$108,000–$212,000. GDK itemises restaurant equipment at $140,000–$175,000 and
construction-bucket costs at $355,000–$680,000. The unit-cost ranking hid
that.

Döner Haus's $300–$837 band overlaps several of the others because a 700–1,200
square-foot imbiss total of $359,500–$586,000 can be divided four ways. Without
line items, those four numbers cannot be traced to construction, equipment, or
fees. They remain a way to see the issued range against the issued footprint,
nothing more.

## How to use a $/sq ft figure without believing it

1. Write down all four combinations, as in the first table, so the midpoint
   does not masquerade as a typical cost.
2. Keep filing year and format on the same line as the unit cost.
3. If you need a construction unit cost, divide only construction-bucket rows
   that the filing already separated — never a guessed slice of a restaurant
   package.
4. Compare the result with a contractor's schematic estimate for the actual
   room, not with another brand's implied $/sq ft.
5. Put landlord TI, stated as dollars per square foot in the lease, on a
   separate line from Item 7 per square foot. They look similar and fund
   different things. See [tenant-improvement
   allowance](/tenant-improvement-allowance/).

A per-square-foot rent quote and an Item 7-per-square-foot figure will look
alike on a spreadsheet and fund different things. Rent is occupancy for a
term. Item 7 is opening cash, including fees and reserves. Landlord TI is a
third dollars-per-foot number, defined by the lease. Keep all three labeled.
Mixing them is how a $50 TI looks like it “covers” Shah's $80,000–$160,000
build-out until the reimbursement date arrives.

The [what the range hides](/what-the-range-hides/) chapter is the qualitative
version of this arithmetic. The [construction](/construction/) chapter is the
row-by-row version. This page exists so that a divided range is shown as a
divided range, and then left behind when the drawings come in.

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