The
Investment
Expenditure |
Estimated Amount or Estimated High-Low Range |
Method of Payment |
When Due |
To Whom Paid |
Initial Franchise Fee(1) |
$22,500 to 55,000 |
Lump Sum |
When you sign the Franchise Agreement |
BGP |
Expenses While Attending Training(2) |
$4,000 - $6,000 |
As agreed |
As incurred |
Hotels; Trans-portation Lines; Restaurants |
Leasehold Improvements(3) |
$0 - $2,000 |
As agreed |
As incurred |
Suppliers |
Furniture, Fixtures, Equipment, Telephone, Signs(4) |
$1,000 - $2,000 |
As agreed |
As incurred |
Suppliers |
Business Licenses(5) |
$0 - $1,000 |
As agreed |
As incurred |
Suppliers |
First 3 Months’ Rent and Security Deposit(6) |
$0 - $2,000 |
As agreed in lease |
As agreed in lease |
Lessor |
Insurance(7) |
$500 - $1,000 |
As arranged |
As agreed |
Insurance Company |
Computer Hardware and Software(8) |
$3,000 - $5,000 |
Lump Sum |
As incurred |
Third Parties |
Professional Fees(9) |
$500 - $1,500 |
As Agreed |
As incurred |
Professionals |
Vehicle(10) |
$1,500 - $3,000 |
As Agreed |
As incurred |
Leasing agents, fuel vendors |
Additional Funds - 3 months(11) |
$23,500 - $33,000 |
Varies |
As incurred |
Third Parties |
TOTALS(12) |
$56,500 – $111,500 |
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Explanatory Notes:
(1) Initial Franchise Fee. You will pay an initial franchise fee ranging from $22,500 to $55,000 when you sign your Franchise Agreement. See Item 5.
(2) Training. You are not charged an additional fee for your initial training. You must pay for transportation and the expenses for your meals and lodging while you attend the program. The total cost will depend on how far you travel and the type of accommodations you choose. This estimate is based on 2 people attending the training.
(3) Leasehold Improvements. If you work out of your home, you may have no leasehold improvement costs. If you lease space, you may incur leasehold improvement costs for walls, carpeting, etc.
(4) Furniture, Fixtures, Equipment, Telephone, Signs. You may need to purchase office furniture, file cabinets, a telephone system, signs.
(5) Business Licenses. Depending on your municipality, you may or may not need a business license.
(6) First 3 Month's Rent and Security Deposit. If you work out of your home, you will have no rental expenses. The high estimate is if you lease space and pay a security deposit of $500 and monthly rent of $500. The amount will vary depending on the location of your office, the size of the space, and the then-current rental market.
(7) Insurance . You must purchase the insurance required by us (see Item 8). The estimate is for a semi-annual premium. The cost of insurance will vary based on the types and limits of the insurance you purchase and other factors affecting risk exposure.
(8) Computer Hardware and Software. You must have a computer, printer, facsimile transmission equipment, peripherals, and our computer software package.
(9) Professional Fees. Legal and accounting fees may include incorporating your company and setting up its books and records. These fees include monies needed to create the new Franchise Owner's business entity (e.g., incorporation) and to set up its books and records. Section 12 of the Franchise Agreement has considerable detail relating to the record keeping requirements. You must keep accurate records of customer inquires, sales, marketing activities, monthly reports, payroll, and accounts payable in accordance with the standard accounting system described in the Operations Manual.
(10) Vehicle. You will need a vehicle in order to make sales calls to advertisers. You will incur costs for fuel, insurance, and maintenance. The low estimate assumes you already have a suitable reliable vehicle, and the high estimate assumes you need to lease one.
(11) Additional Funds - 3 Months. This estimate covers a portion of your anticipated business operating costs including promotion, printing, local travel, and other initial expenses for the first 3 months. These figures are estimates, and we cannot guarantee that you will not have additional expenses starting the business. Your costs will depend on how much you follow our methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market for your products and services; the prevailing wage rate; competition; and sales levels reached during the initial period of operation. Using a 3-month period is not a representation or guarantee that you will break even sometime during the first 3 months of operation, nor intended to provide a benchmark as to when you will break even. NOTE: These figures do not include draw or salary for you. You should have additional sources for payment of personal living expenses.
(12) You must deposit a portion of the total initial investment either with us or into your own bank account. See Item 5, Initial Capitalization of the Uniform Offering Circular.
We have compiled these estimates based on our affiliate’s experience in Cincinnati, Ohio. You should review these figures carefully with a business or financial advisor before making any decision to purchase a franchise. |