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How Much Does It Cost to Open Costa Vida Franchise?

Costa Vida Fresh Mexican Grill is a rapidly growing, fast-casual Mexican restaurant franchise that is expanding throughout the U.S. Guests at this fast food joint enjoy chef-inspired, fresh Mexican food that not only tastes amazing, but looks mouth-watering. The restaurants have a Mexican coast inspired atmosphere that is designed to create a relaxed and welcoming customer experience.

The first Costa Vida opened in Layton, Utah in 2003, and the brand has since expanded to 100 locations across 13 states and into Canada. The restaurant offers a fresh take on Mexican food in a fast-casual setting. The College Station, Texas location is deeply dedicated to serving and giving back to the community.

Starting with hand-made flour and gluten-friendly corn tortillas, every item on the menu is made from scratch daily using the highest quality ingredients and seasonings. With no preservatives, freezers, or microwaves, Costa Vida’s food is fresh, with naturally-addictive goodness.

Costa Vida perfectly blends the convenience and price points of a fast-food restaurant with the freshness, quality, and portions of a full-service restaurant. Costa Vida is the ideal dining destination for business people needing to grab a quick lunch or families that want an affordable and fun spot to take their kids to.

With to-go, drive thru, and catering options available, Costa Vida’s flavorful food can accompany any schedule or event. From feel-good salads to hearty burritos, Costa Vida Fresh Mexican Grill offers delicious options to satisfy every palate.

When you come to Costa Vida, you come to see a show. Your meal is prepared in front of you. In less than five minutes, your custom-made meal created with fresh, hot tortillas, flavorful marinated meats, and gourmet garnishing will bring you back again and again.

The savory flavored, generous portioned, and reasonably priced food presented in a rejuvenating atmosphere brings people back not only as customers, but also as franchise owners on the Costa Vida team.

As a member of Team Costa, you will be part of one of the best concepts in the fastest growing segment in the industry-fresh Mexican fast casual restaurants. As a franchise owner, you will part of a team that strives to be the best fresh Mexican company in the industry.

Costa Vida has also gotten some awards to go along with their amazing meals. They are recognized as one of the fastest growing restaurants in the nation by; as well as named in Franchise Times Fast 55 list.

According to their requirements, their preferred franchise owners are groups that demonstrate a commitment to quality, service, and integrity that protect the system’s brand, value, and growth. Currently, Costa Vida allows franchise locations throughout the United States, but their preferred locations include: Hawaii, California, Florida.

Their franchisees will have access to: a compelling brand, growth opportunities, best-in-class menu, streamlined operational systems, significant site selection and construction expertise, quality and comprehensive training program, convenient customer take-out/delivery options and lots more.

As of the 2017 Franchise Disclosure Document, there are 71 franchised Costa Vida Fresh Mexican Grill locations in the USA. The company has franchise locations in 17 states. The largest region is the West with 63 franchise locations.

Wondering what it costs to open a Mexican restaurant with Costa Vida? We will attempt to give you a run down of estimated costs that are involved in opening a  Costa Vida franchise.

Financial Investment Required to Open Costa Vida Franchise

These are the detailed cost estimates of buying a Costa Vida Franchise. It is based on Costa Vida’s 2018 Franchise Disclosure Document;

  1. Franchise Fee

$30,000 is the standard non-refundable Franchise Fee for a Costa Vida franchise.

  1. Area Development Fee

$15,000 is the Development Fee paid to Costa Vida per Restaurant contracted under the ADA. This fee will then be applied to the then-current Franchise Fee upon the signing of a Franchise Agreement for each subsequent Restaurant developed under the ADA. The development fee is non-refundable.

  1. Travel and Living Expenses While Training: $15,000

You must pay for any incidental expenses that you and your manager and any other trainees incur while attending the initial training program, such as car rental, gas, airline tickets, meals, hotel room, and salaries. You must also pay for any incidental expenses that Costs Vida trainers incur while assisting with your Restaurant Grand Opening as well as while assisting with restaurant site-selection or site-approval processes.

These expenses may include car rental, gas, airline tickets, meals, hotel room, and salaries.

  1. Tenant Improvements and Build-Out: $300,000 to $375,000

These estimates include construction costs (labor and material) and construction management costs for typical tenant improvements and remodeling necessary to prepare a site for operation of a Costa Vida Restaurant. The total estimated initial investment does not include real estate.

You will need to purchase or lease a building of approximately 2,600 to 3,600 square feet, excluding patio area, and pay for the cost of site work and/or leasehold improvements. Costa Vida Restaurants are typically located in stand-alone sites and shopping center outparcels.

The franchisor suggests a corner or end-cap location, with at least 30 feet of minimum frontage. Additionally, your Restaurant must have access to at least 30 dedicated parking spaces if it is not located in a high-pedestrian location. Outside seating is highly recommended.

  1. Building and Design Permit and Professional Fees: $14,000 to $49,000

Note that building and design permit and professional fees may vary depending on the consultants used and the fees charged by the municipalities. The design and permit fees do not include any impact fees which may be imposed by the municipality. The permits and licenses include, for example, business licenses and beer licenses. Building permits are included in the total construction costs.

  1. Restaurant Equipment including POS and Computers: $150,000 to $255,000

This estimate includes kitchen-typical furniture, fixtures, and equipment; computer, POS systems, and related software, including a digital menu system; big-screen televisions or projection system with content/programming; restaurant equipment; preparation, service, and display counters; warmers; stoves; ovens; disposal systems; refrigerators; beverage dispensers; and any other needed equipment, including costs of installation.

  1. Trade Dress, Woodwork, Furniture, Design Package, and Fixtures: $55,000 to $90,000
  2. Opening Supplies and Inventory: $10,000 to $15,000

This estimate includes a supply of initial food and beverage products for use and sale at the Restaurant, including spices, flavorings, produce, meats, dry goods, small kitchenwares, cleaning supplies, paper and packaging supplies, beverage cups, report forms, marketing, and point-of-sale materials.

  1. Smallwares: $15,000 to $20,000
  2. Signage: $8,000 to $33,000
  3. Grand Opening Promotion and Special Assistance: $10,000 to $20,000

You must spend at least $10,000 on a grand opening advertising and promotional program approved by Costa Vida Management, and the franchisor suggests that you spend significantly more to facilitate a successful grand opening.

  1. Security and Utility Deposits: $1,000 to $18,000

You might need to pay deposits for utilities and your property. Deposits for utility services and your property are typically required at the time the service is applied for, and may or may not be refundable.

  1. Insurance: $1,500 to $5,000

You must maintain and keep in force the appropriate insurance coverages as described in Item 8 of the Disclosure Document, with the franchisor named as an additional insured or loss payee on each policy, as applicable. You must also maintain and keep in force all workers’ compensation insurance on your employees that is required under the applicable workers’ compensation laws of the state in which your Restaurant is located.

  1. Additional Funds – 3 Months: $50,000 to $100,000

This estimate includes working capital for the first three months and includes general operating expenses, such as lease payments, inventory, payroll expenses, facility expenses, insurance, pest control, security, repairs and maintenance, complimentary sales, store-level employee wages and benefits, point-of-purchase collateral, other marketing costs, maintenance, linens, cleaning and office supplies, leased equipment, occupancy expenses, credit-card processing fees, and other costs.

This estimate does not include salaries and expenses during training of your Operating Partner, whose training is required by the Franchise Agreement and/or the Area Development Agreement.

  1. Totals: $659,500 to $1,025,000 (not including real estate costs)

This is the amount you should have in mind if you are thinking of owning this delicious franchise. Note that this cost can be higher by now, but this should give you a rough estimate.

What a franchise stands to make from the franchise yearly

Franchise profits from a Costa Vida restaurant depend on a number of variables, including local demand for your product, labor costs, commercial lease rates and several other factors. Typically, franchise profits are proportionate to the size of your investment. To figure out how much money you can make from this franchise, you need to review your personal situation.

But you have to keep in mind that the operations and vendor relationships of Costa Vida will help keep your costs down and contribute to strong unit-level economics and earning potential for your business.