CERTA PROPAINTERS - FDD UFOC ITEM 7 Detail

ITEM 7: ESTIMATED INITIAL INVESTMENT

Note 1 : This table estimates your initial start up expenses for the first three months of operation. All fees are non-refundable unless otherwise indicated.

Note 2: Franchisees typically obtain office space within a few months of starting up. The estimate given for office equipment includes the cost of installing an additional telephone line and a fax machine.

Note 3: You are required to purchase or lease only one vehicle. This amount represents the cost of a lease. The specifications for this vehicle are that it must be an approved wrapped van suitable for the operation of your painting franchise. You may elect to purchase additional vans to keep up with the growth of your franchise, but are not required to do so.

Note 4: Certain states and localities may require you to obtain a painting or home improvement contractor license or registration before you begin operating your franchise.

Note 5: This amount is an estimate of the cost for the hardware and auxiliary software and includes the $6,000 proprietary software fee which includes one identity for Lotus Notes. Currently, additional identities may be arranged at a cost of $155 per identity payable to the vendor. You must purchase the hardware and proprietary software directly from Certa Pro or its designated vendor. See Items 8 and 11 for more details regarding computer hardware and software requirements.

Note 6: You must purchase workers'' compensation insurance in the amount required by state law and public liability and indemnity insurance in the amount of $2,000,000. Some states may require an deposit for workers'' compensation insurance. You must also purchase insurance for your vehicle in an amount required by state law. You should contact an insurance broker for an estimate of the cost of obtaining this insurance before you sign the Franchise Agreement.

Note 7: Initially, franchisees operate their franchises out of their homes. However, within a few months, you may want to secure office space. If you decide to rent office space, your initial investment will increase by the amount of any deposit you may be required to pay in connection with such rental, build-out costs, or pre�paid rent which the landlord may require.

Note 8: These additional funds represent the working capital requirements you should expect to need for the first 3 to 6 months of operations, including your payroll costs. Franchisees may not need the entire amount of working capital; however, those franchisees who intend to operate their franchise in the states of Florida, Arizona, California, Maryland, Virginia, Utah, Washington, Nevada, or New Jersey should expect it to take a longer period of time to get their business fully operational and therefore should budget for up to 6 months of start-up and living expenses.

Note 9: Although CertaPro does not list living expenses necessary to support your lifestyle on the initial investment chart, you will need to have adequate funds available to you, separate from the funds necessary for your initial investment requirements.

Certa Pro cannot guarantee that you will not have additional expenses starting your business. We based these figures on information we gathered from our franchisees. Your costs will depend on various factors such as: how closely you follow Certa Pro''s methods and procedures; your management skill, experience and business acumen; local economic conditions; the local market for our services; the prevailing wage rate; competition; and the sales level reached during the initial period.