What the table actually contains
Item 7 is a grid: one row per cost category, a low and a high estimate for each, the method of payment, when it falls due, and who receives the money. The first row is the initial franchise fee from Item 5. After that come the physical costs — leasehold improvements, equipment, signage, opening inventory — then the soft costs: training travel, insurance, licenses, professional fees. The final row, usually titled “additional funds,” is the franchisor’s estimate of the cash you will burn in the first three months or so of operation.
Two reading rules. First, the footnotes are not optional — they state which store format, which markets, and which landlord assumptions each column rests on. Second, the total row is the only number most people quote and the least useful one in the table; the spread between low and high in each row tells you where your project can blow out.
Why the range runs so wide
Take a real case. The 2026 filing for Jersey Mike’s Subs puts the total initial investment at $436K–$1.16M — the high end nearly triple the low. That is not sloppiness; it is honesty about formats. A conversion of an existing space in a cheap market sits near the bottom. A ground-up build with a drive-thru in an expensive market sits near the top. Both are the same franchise on paper and very different projects in cash.
The width of the range is itself a signal. A brand filing a tight range operates one repeatable format; a brand filing a wide one is telling you that your site decision, not the brand decision, drives most of your cost.
Same aisle of the food court, three different bets
| Brand | Item 7 range | Initial fee | AUV (Item 19) |
|---|---|---|---|
| Jersey Mike’s Subs (2026) | $436K–$1.16M | $20K | $1.37M |
| Tropical Smoothie Cafe (2026) | $276K–$771K | $35K | $978K |
| Smoothie King (2026) | $320K–$1.30M | $30K | $662K |
Read the columns together, not apart. Smoothie King’s range tops out above Jersey Mike’s, but its disclosed average unit volume is roughly half. That does not make it a worse business — margins, formats, and operating models differ — but it does mean the investment-to-sales ratio deserves a hard look before you sign. Our comparison pages line these figures up for any two brands in the directory.
Where to find the table for any brand
You do not need to request a document to see a brand’s Item 7 figures. Every page in our directory shows the filed investment range next to the fee stack and the AUV from the same filing, with the filing year attached — and we refresh the figures on every new annual filing, so you are reading the current document rather than a stale summary.
What the low end really assumes
The low column is real but rare. It typically assumes a small or conversion space, a forgiving market, meaningful landlord contribution, and a build that hits no surprises. Budget from it and you are planning the best case. The discipline that keeps franchisees solvent is simple: qualify your financing against the high end, and treat anything you save against it as margin, not as found money.
What Item 7 leaves out
- Working capital past the first months. The additional-funds row runs out long before most units reach break-even.
- Your own salary. The table funds the unit, not your household, through the ramp.
- Financing costs. Interest and loan fees on the money you borrow to cover the table are not in the table.
- The recurring stack. The royalty, ad fund, and technology fees start the day you open — they live in Item 6, not Item 7.
Pressure-testing the table
The filing hands you its own audit tool: the Item 20 franchisee directory. Call operators who opened within the last two years — not the brand’s referral list — and ask the only two questions that matter: what did you actually spend, all in, and how many months until the unit covered its own costs? Then read the brand’s revenue claims against our guide to AUV, because a startup cost only makes sense relative to what a unit earns. Every brand page in the directory shows the filed range next to the filed AUV so you can do that math in one glance.