How to Read Item 7, the Initial Investment Table

Item 7 of a Franchise Disclosure Document is a table of the franchisor's estimated initial investment: one row per cost category, each with a low and a high figure, and a total row that sums them. The FTC Franchise Rule (16 CFR 436.5(g)) requires it in every FDD, so unlike Item 19 it is never missing. The brand pages on this site print the total row's two ends, the page it came from, and the largest single line in the table.

What the two ends are

The low and high figures are the franchisor's estimate of the least and the most a franchisee will spend to open a unit and run it through an initial period, usually the first three months. They are not the cheapest and dearest units that have actually opened; they are estimates, built line by line from the franchisor's experience. The rule requires the franchisor to say what each line is based on and whether any part of it is refundable, which is why the footnotes under the table matter as much as the figures.

In McDonald's 2026 FDD, the traditional restaurant column runs from $1,472,000 to $2,807,000 (Item 7, page 16). The largest line is "Signs, Seating, Equipment, and Decor" at $1,100,000 to $1,850,000, which on its own accounts for most of the range. The same table gives two smaller formats, $1,015,500 to $1,864,500 and $701,000 to $1,411,500, so a brand can have several Item 7 totals and the page has to say which one it is showing.

What the range leaves out

The most important footnote in many tables is the one about real estate. McDonald's range excludes land and building, because McDonald's owns or leases the site itself and charges the franchisee rent. Stanley Steemer's $175,685 to $509,745 (2026 FDD, Item 7, page 24) does not include real estate costs. Penn Station's $440,600 to $819,700 (page 15) does not include lease expenses. Two brands with the same printed total can therefore describe very different outlays, and the brand page carries the franchisor's own note beside the figure for that reason.

Royalties and ongoing fees are usually excluded as well. Crumbl's $848,566 to $1,472,533 (2026 FDD, Item 7, pages 28 and 29) excludes royalties and marketing fees, which are Item 6 charges on sales once the unit is open. And some tables print a figure that is not a unit at all: Crumbl's second table is a three-unit development example totalling $2,545,698 to $4,417,599, which the site does not use as a per-unit number.

Financed versus cash

A few franchisors print the out-of-pocket figure when the franchisor finances part of the opening. Wendy's 2026 FDD gives $1,580,457 to $3,105,000 for paying cash for every expenditure (page 19) and $409,691 to $785,000 if the fee, building and equipment are financed. Snap-on's estimated total is $223,439 to $509,283 (page 15), while the out-of-pocket column under its Franchise Finance Program is $20,778 to $82,943. The site records the total-investment column in both cases and puts the financed figure in the note, because the total is what the unit costs regardless of who lends for it.

The midpoint is a divisor, not a figure

The brand pages compute a revenue-to-investment ratio: the Item 19 median divided by the Item 7 total. A range has no single value to divide by, so the page divides by the midpoint and shows the low and high results beside it. For Jersey Mike's (2026 FDD), the median unit volume of $1,305,850 (Item 19, pages 50 and 51) against the $436,176 to $1,162,228 range (Item 7, pages 16 and 17) gives:

• Median over the low end: 2.99
• Median over the midpoint of $799,202: 1.63
• Median over the high end: 1.12

The midpoint figure is nowhere in the FDD. It is the arithmetic mean of two estimates, and the ratio against it is only a way of putting one number on a range. The two ends are the figures the franchisor filed, and the spread between 2.99 and 1.12 is the honest answer. A ratio of 1.00 means one year of median unit revenue equals the investment; it says nothing about profit, because revenue is before rent, royalty, labor and cost of goods.

What this guide does not cover

It does not estimate a figure the franchisor left out of the table, and it does not say whether a given range is high or low for its category. Item 7 totals differ in what they include, so two brands' ranges are not comparable on one number. Whether the franchisor's estimates have matched what franchisees actually spent is not disclosed in the FDD and the site does not guess at it.

Every brand on the brand index shows its Item 7 range, page and note the same way, so the two ends and what they exclude can be read side by side.

Sources

• 16 CFR 436.5(g), Item 7: Estimated initial investment
• McDonald's, Jersey Mike's, Stanley Steemer, Penn Station, Crumbl, Wendy's and Snap-on 2026 FDDs as filed with Wisconsin DFI, Item 7 pages as cited; each brand page links the filing record at Wisconsin DFI Franchise Search.

This guide is informational only. It is not financial, legal or investment advice, and Unitnomics is not affiliated with any franchisor, state regulator or the FTC. It reports what a franchisor filed and what the site computed from it; it does not advise on whether to buy a franchise.

Last reviewed: November 2026 · Against 16 CFR 436.5(g) and the 2026 FDDs cited below.