FAQs

CHIPS 09

How much will it cost to open a CHIPS Store?

The initial cost of opening a CHIPS franchise store is estimated at around £62,950 exc VAT depending on the site. This is based on our experience of opening new franchised stores in the region of 55 sq m and

CHIPS Market Harborough

CHIPS Market Harborough

includes shop design & layout  fitting, initial new and pre-owned stock, specialist equipment including bespoke EPOS system, display items, most property legal fees and the CHIPS franchise package.

What is the CHIPS Franchise Package?

This covers the cost of goods and services which CHIPS Franchise Ltd provides for all franchisees during pre trading and initial start-up.

It includes assistance with identifying a suitable location and site; negotiations with landlord; assistance with the production of a business plan and introductions to raising funds ( if requires); comprehensive induction training programme  for two people; merchandising support from experienced CHIPS personnel on-site during first trading week; pre and post-opening support; initial marketing advice and support; legal expenses to issue the franchise agreement and provision of the Franchise Operations Manual.

How much does a shopfit cost?

The average CHIPS store will cost approximately £30,000 exc of VAT to fit, based on a retail area of 55 sq m. This can vary subject to individual premises.

How much money will I need to invest myself?

You will need to invest around £30,000 from personal funds, which are not subject to any repayments or loans. Banks will generally fund the rest (subject to status).

How much working capital will I need?

In addition to the set-up fees of approximately £62,950 exc of VAT, you will probably need a  working capital of £5,000 for the first two or three months. This will depend on what time of year you open and the stock levels needed in your store. This is usually funded by an overdraft facility (subject to status).

Do I have to work in the store full-time?

Initially, yes. If you are the sole franchisee you must work full-time in the store for the first year. If you are running the store with a partner or family member or friend, one of you must work in the store full-time, without any other work commitments, for the first year.

How much can I make?

An established franchise can turnover more than £270,000 with an average gross profit of around 30%.

How much do I pay CHIPS?

CHIPS Franchise Ltd’s income is related to the success of our franchisees and is calculated as a % of net sales.

Our ongoing fees payable weekly, are:

  • 6% Management Fee

This covers the running costs of the franchise system and ongoing support services.

  • 1% Marketing Fee

This covers marketing activities for the benefit of the whole network.

  • 1% Stock Distribution Contribution

This contributes towards the handling and distribution of stock to and from the warehouse.

How long is my Franchise Agreement?

Usually, five years. We try to match the agreement directly to the lease on the store. If you take a 10-year lease with a five-year break clause, you would have a five-year franchise agreement, which could be renewed if you decide to continue to the end of the lease. Occassionally, leases are for six or seven years and we would look at each situation on its merits.

How much will it cost to renew my franchise agreement?

Franchisees have right of renewal as long as there have been no material breaches of the old agreement. They must also agrees to bring the store up to the current standard as set out by the franchisor, enter into a new current franchise agreement and pay any legal expenses incurred.

NB   This information is for illustration purposes only

Please note that the figures above exclude VAT and the information does not form part of a contract with CHIPS Franchise Ltd or Darkplains Ltd. It is not a guarantee of profit and is intended as a guide for use by potential franchisees and their advisors. You are advised to take full professional advice before entering into any franchise system.

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