# What it costs to open

Item 7 is the franchisor's estimate of the money needed to develop, open, and
fund the stated initial period of a franchise. The federal disclosure format
asks for each type of expenditure, its amount, how and when it is paid, and who
receives it. The [FTC's Franchise Rule compliance
guide](https://www.ftc.gov/system/files/documents/plain-language/bus70-franchise-rule-compliance-guide.pdf)
also makes an important boundary clear: Item 7 is an initial-investment
disclosure, not a forecast of every rent, royalty, or advertising payment over
the life of the agreement.

That makes the headline range useful, but not self-explanatory. A low estimate
may assume a reusable restaurant space, a landlord contribution, a smaller
format, or a discounted fee. A high estimate may include a shell build,
substantial mechanical work, or a longer operating reserve. One filing may
combine equipment and furniture in a package while another separates them.
The same cost can therefore sit under different labels—or inside a broader
line that cannot be split without inventing data.

## How to use the directory

Start with **format and filing year**, not rank. A 1,200-square-foot counter
shop and a 4,000-square-foot full restaurant are different projects even when
their totals overlap. Figures from different years also carry different labor,
material, and rent assumptions. Every row below keeps the disclosure year
beside the figure for that reason.

Next, open a line-item page where one is available. Read the original labels,
then the footnotes in the issued FDD. This index preserves the filing's numbers;
it does not turn “restaurant package” into a guessed equipment/construction
split. If a filing supplies only a total, the total remains listed and the
breakdown remains absent.

Finally, replace the filing's general assumptions with evidence for the actual
site:

1. obtain a contractor's site-specific scope;
2. reconcile the lease, landlord work, and tenant-improvement allowance;
3. price the required equipment and utility connections;
4. build a monthly cash model for the stated initial period and beyond; and
5. compare the result with recent franchisees' actual opening costs.

The [FTC's review guide](https://www.ftc.gov/business-guidance/blog/2023/05/franchise-fundamentals-taking-deep-dive-franchise-disclosure-document)
specifically points readers to recent franchisees for opening-time and
total-investment evidence. Public state records provide another check on what
an Item 7 actually says: Minnesota's filed
[Shah's Halal disclosure](https://cards.web.commerce.state.mn.us/documents/%7B9078B29B-0000-C21E-982F-C2FDAFB07783%7D/download?contentSequence=0&documentClass=FRANCHISE_REGISTRATIONS)
separates construction from a fixture package, while a filed
[Great Greek disclosure](https://cards.web.commerce.state.mn.us/documents/%7B40DC349A-0000-CFD3-B1AA-6F584E40E621%7D/download?contentSequence=0&documentClass=FRANCHISE_REGISTRATIONS)
uses a combined equipment, furniture, supplies, and fixtures line. Those are
not interchangeable labels.

The chapters on [construction](/construction/), [equipment](/equipment/),
[working capital](/working-capital/), [range interpretation](/what-the-range-hides/),
and [rent](/rent/) explain the largest comparison traps. The directory then
shows the issued totals without filling any silence in the filings.

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