# Licenses and permits

A licenses row is an opening-government-and-utility estimate: business
licenses, health permits, and sometimes the deposits paid to start electric
and gas service. It is not the building permit sitting inside the
construction contract, and it is not a liquor license unless the footnote
says so. A $1,000 low is a disclosed estimate for a class of fees, not a
quote from the authority having jurisdiction.

The league table at the end of this chapter includes every licenses-bucket
row. All five itemised filings have one. Great Greek's label is the outlier
because it combines utility deposits with licenses.

## The five disclosed rows

| Brand | Filing label | Low | High |
| --- | --- | ---: | ---: |
| German Doner Kebab | Business Licenses | $1,000 | $5,000 |
| Shah's Halal Food | Licenses, Permits | $1,000 | $3,000 |
| The Great Greek | Utility Deposits/Licenses | $1,000 | $3,000 |
| Mad for Chicken | Business Licenses and Permits | $2,500 | $5,000 |
| 375° Chicken 'n Fries | Business Licenses and Permits | $2,000 | $5,000 |

GDK names licenses only. Mad for Chicken and 375° name licenses and permits.
Shah's names licenses, permits. Great Greek names utility deposits and
licenses in one cell. Those are four different inventories wearing similar
numbers. The bands themselves are tight: every low is $1,000–$2,500, every
high is $3,000–$5,000. Uniformity here is a warning. Building permits,
sign permits, grease-interceptor permits, and fire-alarm fees do not cluster
that neatly across cities.

## What usually sits in construction instead

Plan review, building permits, and inspections are often inside the general
contractor's number or inside a design fee. GDK's **Architects and Project
Manager Fees** of $30,000–$50,000 and **Leasehold Improvements** of
$0–$250,000 are the rows where a building permit can hide. Great Greek's
**Design and Project Management Fee** of $10,000 and **Leasehold
Improvements** of $250,000–$650,000 are the same kind of neighbor. Mad for
Chicken's **Architectural Plans** of $10,000–$20,000 and 375°'s of
$8,000–$12,000 may or may not include permit expediting.

If the contractor's schedule of values has a permit line, do not also spend
the Item 7 licenses high on the same permit. If it does not, the licenses
row will not cover a shell's plan-check fees. The [construction](/construction/)
chapter is where that boundary belongs; this chapter only insists that
“permits” in a $3,000 cell is probably health and business, not the building
department.

Sign permits are another split. GDK signage is $20,000–$35,000; Shah's is
$10,000–$28,000. A monument-sign engineering fee can exceed Great Greek's
entire $1,000–$3,000 combined row. Put the sign permit next to
[signage](/signage/) unless the footnote puts it here.

## Utility deposits are not a license

GDK's **Lease, Utility & Security Deposits** of $25,000–$30,000 already
includes utility deposits in the real-estate bucket. Great Greek put utility
deposits in this licenses row instead. Mad for Chicken and 375° used **Lease
& Utilities deposits** ($15,500–$37,500 and $10,000–$30,000). A Great Greek
buyer who funds only $1,000–$3,000 for “licenses” and then faces electric and
gas deposits has not been surprised by the filing — the label said utility
deposits were in the cell — but has been surprised by the amount if each
provider wants a two-month deposit.

The [deposits and prepaid](/deposits-and-prepaid/) chapter treats those holds
as opening cash. Keep Great Greek's combined label on this page's league
table, and still split the checkbook: one line for licenses, one for deposits,
even when Item 7 did not.

## Worked example: the row will not travel

Shah's $1,000–$3,000 against a $405,000 printed total is at most 1 percent of
opening investment. GDK's $5,000 high is less than 1 percent of $1,123,000.
Those shares say nothing about a city that requires a separate grease-waste
permit, a county health plan review, a fire-department hood inspection, a
sign variance, and a business-tax registration, each with its own invoice.

Minnesota's public [Shah's Halal
filing](https://cards.web.commerce.state.mn.us/documents/%7B9078B29B-0000-C21E-982F-C2FDAFB07783%7D/download?contentSequence=0&documentClass=FRANCHISE_REGISTRATIONS)
and 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)
are useful as examples of how short these rows are next to construction. They
are not a fee schedule for a different state. The FTC's [compliance
guide](https://www.ftc.gov/system/files/documents/plain-language/bus70-franchise-rule-compliance-guide.pdf)
requires an estimate of the types of expenditure; it does not freeze another
city's fee ordinance inside last year's FDD.

## License and permit checklist

1. Copy the filing's licenses label, including Great Greek's combined wording.
2. List business license, health permit, food-handler cards, fire inspection,
   sign permit, building permit, and any concept-specific permit (hood,
   grease, occupancy).
3. Mark which of those sit in this Item 7 row, in construction, in signage,
   or in professional fees (expediter).
4. Split utility deposits onto the deposit worksheet.
5. Price the actual city's fee schedule and the landlord's required
   certificates before treating the Item 7 high as a cap.
6. Ask recent franchisees which permit arrived late and what it cost,
   following the FTC's
   [FDD walkthrough](https://www.ftc.gov/business-guidance/blog/2023/05/franchise-fundamentals-taking-deep-dive-franchise-disclosure-document).

## Expediters, inspections, and the opening-day certificate

A health-department plan review can take weeks after the architect's drawings
are done. A fire-department hood test can be scheduled only after the
suppression system is charged. A certificate of occupancy can wait on both,
and on accessibility, and on a grease-interceptor inspection. None of that
calendar is in GDK's $1,000–$5,000 **Business Licenses** band or in 375°'s
$2,000–$5,000 **Business Licenses and Permits**. It is in the contractor's
schedule and in [working capital](/working-capital/) if the delay starts rent
before sales.

Expediters are professional services. They may sit in
[professional fees](/professional-fees/) — GDK $10,000–$15,000, Shah's legal
and accounting $3,000–$6,000, Mad for Chicken $2,500–$7,000, 375° $2,000–$5,000
— or they may be a separate invoice. Great Greek has no professional-fee row;
its $10,000 design fee is construction. Do not assume the licenses cell pays
the expediter.

Temporary permits for a soft opening are easy to miss. GDK's grand-opening
label names a soft launch; 375° and Mad for Chicken do not. A temporary
certificate that lets a friends-and-family night happen can be a second fee,
or it can be included in the occupancy certificate. Ask the city, not the
Item 7 high.

Liquor, if the concept ever adds it, is almost never inside a $3,000 licenses
row. None of the five itemised filings in this dataset is a bar. If a buyer
later wants beer, that is a new permit, a new bond, and often a new lease
clause. Do not park it in Shah's **Miscellaneous Opening Costs** of
$5,000–$15,000 without a footnote that says so.

## Worked example: Great Greek's combined cell

Great Greek's **Utility Deposits/Licenses** of $1,000–$3,000 has to do two
jobs that GDK split across **Business Licenses** ($1,000–$5,000) and **Lease,
Utility & Security Deposits** ($25,000–$30,000). A $3,000 high cannot be both
a New York-area utility deposit package and a set of business and health
licenses unless the footnote assumes credits, waivers, or a landlord who
already has the meters in the tenant's name. The combined label is honest
about the mix and unhelpful about the amount. Split the checkbook anyway:

- licenses and health permits, quoted from the city;
- electric, gas, water, and communications deposits, quoted from the
  providers;
- any remaining amount that still fits in $1,000–$3,000, which may be none.

The rest of Great Greek's opening cash is elsewhere: deposits
$5,000–$16,000, design $10,000, leasehold $250,000–$650,000, restaurant
package $225,964–$248,560, additional funds $35,000–$75,000. The licenses
row is not where that project is funded.

The injected comparison below sorts licenses rows by high estimate. Use it to
see the labels. Use the city and the health department to see the invoices.

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HTML: https://donerhandbook.com/licenses-and-permits/