ITEM 7
ESTIMATED INITIAL
INVESTMENT
2Most amounts are affected by
the size of the Franchise Package you purchase. Generally, the greater the
Initial Business purchased, the greater the amount of the initial investment.
(See Item 5.)
3The Initial Franchise Fee is
discussed in detail in Item 5. We offer financing for the Initial Franchise Fee
at 12% interest as described in Item 10. The term of the loan is up to 3 years
as described in Item 5. We will provide you with initial training, start-up
cleaning customers, and the initial equipment and supply package, all of which
are included in the Initial Franchise Fee. (See Exhibit A to the Janitorial
Franchise Agreement for a detailed list of all equipment and supplies
included.)
''These fees are nonrefundable.
includes office supplies,
business cards, and identification badges.
6You are required to purchase
approved uniforms at a cost of about $15-$30 per uniform for all persons
performing services on a customer''s premises. A limited number of uniforms are
provided as part of the initial equipment and supply package. (See Exhibit A to
the Janitorial Franchise Agreement.) Although we are a supplier of uniforms,
you are not required to purchase the approved uniform(s) from us. However, we
must approve the use of any Coverall� Marks appearing on uniforms purchased
from third parties.
7You will need additional funds
for expenditures during the start-up phase to the extent that these costs are
not covered by your initial revenues. We define the start-up phase to be four
months after you begin servicing your first account. If you are purchasing
$2,000 or more in initial volume, you will probably need to purchase a floor
polisher, the purchase cost of which has been included in the maximum amount. We offer
financing for the purchase of equipment as described in Item 10. The "additional
funds" category reported here is not an assurance that additional working
capital will not be needed. Your own managerial ability and other factors
beyond our control may result in additional start-up expenditures or time.
8The cost of insurance varies
depending upon your prior history, terms of payment, and various other factors.
The range of prices for comprehensive liability insurance purchased through our
Business Protection Program is ordinarily $52 to $345 per month, depending on
the volume of your business. The range of prices for job related accident
insurance purchased through Coverall is ordinarily $36 to $220 per month, for
$1,500 and $10,000 Franchise Packages, respectively. The rate for Coverall''s
Accident Program will be 2.4% (including Coverall''s .2% administration fee) of
Gross Monthly Billings for sole proprietor or partners. Coverall''s rates for
insurance coverages are subject to change per footnote 12 in Item 6. If such
change(s) is made, the premium may differ by state(s). Some insurance companies
require an up�front deposit to purchase worker''s compensation insurance.
9We do not require you to
purchase or lease any real estate. Most franchisees operate their franchise
from home. In addition, since most franchisees do not have employees during the
start-up phase, payroll costs are not included here.
l0These figures are estimated and
we cannot guarantee that you will not have additional expenses starting the
business. Your costs will depend on factors such as: how well you follow our
methods and procedures; your management skill, experience, and business acumen;
local economic conditions; the local market for cleaning services; and
competition. We relied on our experience in the commercial cleaning business
since 1985 to compile these estimates. You should review these figures
carefully with a business advisor before making any decision to purchase the
franchise.
1 ''This amount includes the Initial Franchise Fee, a
portion of which may be financed.
12You are required to have access
to a personal computer or hand-held device, such as a cell phone or personal
digital assistant ("PDA"), with Internet access and the ability to
send and receive electronic mail. However, we are not specifying what type of
device you use to access the Internet and electronic mail.
l3You will need a vehicle in
connection with this business. The low estimate is for fuel and routine
maintenance only and assumes you have an insured vehicle. The high estimate assumes
you do not already have an insured vehicle and need to lease one or make
payments on a purchased one.
