Who pays for what

A utility deposit is money handed to a power company. It is not rent, the landlord never touches it, and it comes back when the account closes. In German Doner Kebab’s 2024 filing it appears inside a row called Lease, Utility & Security Deposits. Mad for Chicken and 375° Chicken ‘n Fries each call their version Lease & Utilities deposits. Great Greek’s 2023 filing files the same payment under Utility Deposits/Licenses, next to permits rather than next to rent. Döner Haus’s 2026 filing gives it a row of its own, Utility Deposits, at a fixed $3,000. Shah’s Halal Food names no utility deposit at all, disclosing Real Property of $3,000–$10,000 and Licenses, Permits of $1,000–$3,000 and leaving the reader to work out where a meter deposit went.

One payment and one payee: bundled with lease deposits in three filings, bundled with permits in a fourth, standing alone in a fifth, and unnamed in the sixth. That is the whole problem of this chapter in a single row. Item 7 organises costs by the franchisor’s sense of category, and a buyer needs them organised by who receives the money and when.

Three payees, and the column that names them

The disclosure format asks for more than an amount. It asks for the method of payment, when the amount is due, and to whom it is paid. That fourth answer is the one a compiled table of dollars cannot carry, and it is the one that turns a cost schedule into a cash plan. Read it in the filing itself, as the how to read Item 7 sequence puts second, before any comparison.

Broadly, the money goes three places. To the franchisor or an affiliate: the initial franchise fee, any required package, and services the franchisor performs. To the landlord: security deposits, prepaid rent, and any tenant obligation the lease converts into a landlord charge. To third parties: general contractors, architects, equipment vendors, sign fabricators, insurers, utilities, municipalities, and advertising suppliers.

Only the first of those is fixed by the franchise agreement. Every itemised filing here states the fee as an amount rather than a range — $30,000 at German Doner Kebab and Shah’s, $35,000 at Mad for Chicken and Döner Haus, $40,000 at 375° — except Great Greek, whose $35,550–$39,500 band is two classes of buyer rather than two prices. The franchise fee chapter covers that. Everything else in the table is a prediction about somebody the franchisor does not control.

The rows that name an intermediary

Two filings disclose a real-estate intermediary and three do not. German Doner Kebab’s 2024 table carries a Property Agent line at $0–$0. Great Greek’s 2023 table carries a Real Estate Service Charge at $0–$3,500. The first is a disclosed zero at both ends; the second is a range whose floor happens to be nothing, which the low column and high column chapter treats as a different kind of statement.

Both rows are worth a question about who is being paid and by whom. A tenant representative is often compensated out of the landlord’s commission rather than by the tenant, which would explain a zero — and a fee that lands on the tenant in a particular market would explain the other row. Neither filing says. Shah’s, Mad for Chicken and 375° have no such row, so a buyer working with a broker in those systems needs the arrangement in writing rather than inferred from a table.

The same physical work, filed differently

A commercial hood is the standard example. Hung by a general contractor it looks like construction; shipped with a kitchen package it looks like equipment; supplied by the franchisor with the rest of the kit it looks like a package. The filings reflect all three habits. German Doner Kebab discloses Fit Out Materials & Installation of $175,000–$205,000 in the construction group beside Restaurant Equipment of $140,000–$175,000. Shah’s puts a Fixture Package of $30,000–$50,000 beside Build-Out/Construction of $80,000–$160,000 without saying which line holds a hood, a sink, or a walk-in box. Great Greek’s Restaurant Package of $225,964–$248,560 is a bundle the filing does not open.

Design work splits the same way. German Doner Kebab files Architects and Project Manager Fees of $30,000–$50,000 in construction and keeps Professional Fees of $10,000–$15,000 separately. Mad for Chicken and 375° file Architectural Plans in construction and Professional Fees separately. Great Greek files a Design and Project Management Fee of $10,000 in construction and has no professional-fee row. Shah’s has neither an architecture row nor a project-management row, only Legal & Accounting at $3,000–$6,000. The professional fees chapter reads that pattern row by row.

Launch spending is the third case. Five filings disclose a named campaign — German Doner Kebab’s Pre-Launch, Soft Launch and Grand Opening Marketing at $10,000–$15,000, Shah’s Grand Opening Campaign at $1,000–$5,000, Mad for Chicken’s fixed Grand Opening Advertising at $15,000, 375°’s fixed $10,000, and Döner Haus’s $5,000–$10,000. Great Greek’s grand opening is inside the restaurant package. The same activity therefore sits in a marketing bucket in five filings and in a package in the sixth, which is exactly why the grand opening chapter refuses to compare the cells directly.

Why the boundary moves at all

The bucket follows the buyer, not the work. When the franchisor or its affiliate supplies something, it becomes a package or a fee, priced tightly because the franchisor sets the price — Great Greek’s package spans $225,964 to $248,560, a narrow band beside leasehold improvements of $250,000–$650,000. When a general contractor installs something, it becomes construction, priced widely because the site decides. When the operator buys it directly, it becomes equipment, signage, or technology.

That is a supply-chain fact wearing accounting clothes, and it has one useful consequence: the label tells you something real about who you will be negotiating with. A cost inside a franchisor package is not shoppable. A cost inside a construction row is bid. A cost inside a deposit row is governed by a lease. Item 8 is where required sources are disclosed, and reading it against Item 7 converts a category into a counterparty.

Landlord work is not a cost line

The largest single transfer in a restaurant buildout may not appear in Item 7 at all. If a landlord delivers a shaft, a restroom core, a grease line and conditioned air, that work is worth money and shows up as an absence — a low construction figure, or German Doner Kebab’s Leasehold Improvements low of $0. If the landlord instead writes a cheque, that is a tenant-improvement allowance and a cash-timing question rather than a discount. If the landlord offers free rent, that funds occupancy and not the contractor.

Three different arrangements, all describable as “the landlord is contributing,” and only one of them reduces the construction cash a tenant must find before opening. The tenant-improvement allowance chapter separates them, and second-generation versus shell tests what is physically present before any of it is priced.

Who pays first

Sequence matters more than category once the money starts moving. The franchise fee is typically due at signing, before a site exists. Lease and utility deposits are due at execution. Equipment deposits are due at order, which can be months before delivery — German Doner Kebab’s restaurant-equipment high of $175,000 and Great Greek’s package of up to $248,560 are both early cheques larger than their respective deposit rows. Contractor draws follow inspected work, less retainage. Insurance is due before a landlord will release keys. Training travel is due before opening week. Any landlord reimbursement arrives last, after lien waivers and proof of payment.

An Item 7 total says nothing about that order, which is why a project can stay inside a disclosed range and still run out of cash halfway through.

Sorting the table by payee

1. Copy the “to whom paid” and “when due” columns from the filing beside every amount.
2. Group the rows into franchisor and affiliate, landlord, and third party.
3. Mark each third-party row as bid, quoted, or fixed by a public fee schedule.
4. Check Item 8 for every row you assumed was shoppable.
5. Write the landlord’s contribution as work performed, money contributed, and rent forgone — three lines, not one.
6. Order the whole list by payment date and read the running cash requirement, not the total.
7. Carry the result onto the worksheet and into from Item 7 to a site budget.

The categories in Item 7 are the franchisor’s. The payees are the buyer’s problem, and they do not line up. A row that moves between buckets across filings has not changed what it buys; it has changed who is expected to buy it, which is the more useful fact of the two.