From Item 7 to a site budget

There is a moment in every deal when the disclosure document stops governing the numbers. It is the moment a specific room enters the picture: a lease exhibit describing what the landlord will deliver, a contractor walking the space, a permit counter with its own fee schedule. From then on the Item 7 table is historical evidence about what a franchisor estimated for a class of sites, and the budget belongs to the site.

Making that handover deliberately is the whole exercise. Done badly, the filing survives as a set of placeholder numbers nobody replaced, and the project discovers in month three which of them were wrong. Done properly, every row in the table ends up in one of three states: carried across at face value, replaced by a document, or expanded into several lines the filing never had.

The rows that carry across

Almost nothing does, and the one clear exception is the franchise fee. Five of the six itemised filings state it as a single figure — $30,000 at German Doner Kebab and Shah’s Halal Food, $35,000 at Mad for Chicken, $40,000 at 375° Chicken ‘n Fries — and it is an amount owed under the franchise agreement rather than an estimate of a market price. It belongs on the budget at the disclosed number, on the date Item 5 says it is due.

Even that row needs its footnote read. Great Greek’s 2023 band of $35,550–$39,500 is not a range of possible prices for one buyer; the low is a discount available to owners of affiliated brands and the high is the first-time fee. A budget for a first-time buyer carries $39,500, and the franchise fee chapter is where that distinction lives.

Everything else in the table is an estimate of what a third party will charge in a market the franchisor cannot see.

Lease and landlord work become three cash flows, not one deposit row

The real-estate rows are opening cash held or prepaid, and they are the smallest part of what the lease decides. German Doner Kebab discloses Lease, Utility & Security Deposits of $25,000–$30,000 and a Property Agent row of $0–$0. Shah’s discloses Real Property of $3,000–$10,000. Great Greek discloses Real Estate Lease Deposits of $5,000–$16,000 and a Real Estate Service Charge of $0–$3,500. Mad for Chicken and 375° each disclose Lease & Utilities deposits, at $15,500–$37,500 and $10,000–$30,000.

Replace those single cells with the lease’s own terms, split three ways: what the landlord performs, what the landlord contributes and on what mechanics, and what the tenant pays and when. The tenant-improvement allowance chapter treats the contribution as a cash-timing problem rather than a deduction, which is the error that empties a construction account fastest. The rent chapter separates the deposit from the occupancy cost, and deposits and prepaid amounts separates held cash from spent cash. The City of Seattle’s public commercial lease tool is a workable checklist for extracting those terms, because it asks when rent starts and who performs landlord work rather than what the space costs per foot.

Rent commencement is the single date that converts a construction schedule into a cash requirement. Put it on the budget as a date, not a line item.

Contractor scope replaces the construction row entirely

No construction cell in any filing survives the conversion. German Doner Kebab’s construction-bucket rows run $355,000–$680,000, Great Greek’s $260,000–$660,000, Mad for Chicken’s $85,000–$255,000, 375°’s $108,000–$212,000, and Shah’s single Build-Out/Construction line $80,000–$160,000. Those bands describe different label schemes over different assumed delivered conditions, as the construction chapter sets out.

What replaces them is a scope document: drawings, a schedule of values, named allowances, unit prices for the work that cannot be drawn yet, and a written list of exclusions. The exclusions matter more than the total, because the exclusions are what arrives later as a change order. The change orders and overruns chapter is about that gap, and second-generation versus shell is the survey that decides how large it is likely to be.

Architecture and project management move with the scope. German Doner Kebab prices Architects and Project Manager Fees at $30,000–$50,000 inside construction; Mad for Chicken and 375° carry Architectural Plans at $10,000–$20,000 and $8,000–$12,000; Great Greek carries a fixed Design and Project Management Fee of $10,000. Shah’s has no architecture row at all. Where a filing is silent, the budget still needs the line — a jurisdiction that requires stamped drawings requires them regardless of which table you read.

Equipment becomes a quoted matrix, and the package stays whole

The equipment rows convert into a function-by-function schedule. German Doner Kebab splits Restaurant Equipment at $140,000–$175,000, Furniture & Fixtures at $15,500–$20,000, and Small Wares at $11,000–$15,000. Mad for Chicken and 375° each disclose one Furniture, Fixtures and Equipment line, at $85,000–$110,000 and $100,000–$120,000. Shah’s discloses a Fixture Package of $30,000–$50,000.

Quote each required function separately — cook, hold, refrigerate, wash, prep, serve, seat, store — and add freight, tax, rigging, connection, commissioning and lead time as their own columns, because those are the costs a purchase price omits. Check the result against Item 8 before treating any third-party quote as available; a mandated supplier changes the number and the negotiation. The equipment chapter works through that boundary, and equipment financing and leasing covers how the funding structure interacts with it.

Great Greek’s Restaurant Package of $225,964–$248,560 is the exception that proves the rule. It cannot be converted into a matrix from public data, because the filing does not say what is inside it. On a site budget it stays one line until the franchisor or a franchisee documents the contents, exactly as the restaurant package chapter insists.

Opening inventory becomes an order, and training becomes an itinerary

Two rows convert into documents that are easy to produce and often skipped.

Opening inventory is a product order priced from the approved distributor’s current list against the opening week’s forecast. Disclosed estimates include $15,000–$20,000 at German Doner Kebab, $10,000–$30,000 at Shah’s, $7,000–$15,000 at Great Greek, $14,250–$28,200 at Mad for Chicken, $5,000–$10,000 at 375°, and $10,000–$17,000 at Döner Haus. Those are estimates for an assumed menu and volume; a real order is a list of cases. The opening inventory chapter keeps that row separate from the reserve that replenishes it.

Training rows are travel, and travel is an itinerary. Item 11 gives the hours to build it from: German Doner Kebab discloses 40 classroom and 120 on-the-job hours, Shah’s 19 and 85, Great Greek 60.25 and 180, Mad for Chicken 25 and 196, 375° 23 and 67, Döner Haus 24 and 56. Multiply the days by the number of people who must attend, price the actual flights and lodging, and compare the result with the disclosed row — $5,000–$10,000, $2,000–$20,000, $10,000–$20,000, $4,000–$10,000, $100–$5,000, and a fixed $10,000 fee plus $0–$3,000 of travel respectively. The training costs chapter explains why the row is usually not tuition.

Cash through the stated period, and then past it

The last conversion is the additional-funds row, and it is the one that changes shape rather than value. Five filings estimate three months and Great Greek up to six. A budget needs a month-by-month cash forecast that runs past whichever period the filing named, with occupancy, payroll, cost of goods, Item 6 royalties and funds, insurance, technology charges, debt service and an owner draw as separate lines, and with card settlement timing shown as a delay rather than assumed away.

The SBA’s startup-cost worksheet separates one-time from monthly, which is the right frame; the working capital chapter builds the monthly half and the additional-funds line chapter explains what the disclosed cell was and was not describing.

The sheet this produces

1. Filing label, filing low, filing high, exactly as printed.
2. Site evidence: the document that replaced the cell, named and dated.
3. Budget amount for this project.
4. Difference and reason, in a sentence a lender or partner can read.
5. Payment date, and to whom.
6. A named contingency line the filing does not have, sized from the scope’s exclusions rather than from a rule of thumb.

The worksheet is that sheet with the reading order printed on it, and how to read Item 7 is the sequence that fills the first column. What comes out is not a corrected Item 7. It is a project budget standing beside a disclosure, with every difference explained — which is the only form in which the two documents can both stay true.