FOOTNOTES TO ITEM 7
Note 1.
Initial Franchise Fee.
The Initial Franchise Fee is $19,500 and is payable in
a lump sum paid upon signing of the Franchise Agreement and approval of the
Franchise Owner by the Company.
Note 2.
Initial Inventory.
We estimate that your initial inventory costs will be
approximately $2,500 to $3,500 and will consist of certain inventory items that
you must purchase from approved vendors.
Note 3.
Signage.
We estimate that the truck signage costs will be $650
to $750. All signs must be pre-approved by the Company.
Note 4.
Equipment Package.
The minimum required equipment package costs $76,000
and must be purchased from us. This minimum equipment package will consist of
two model 4800 and one refurbished 3000 DryJect� machines and certain spare
parts. With acceptable credit, the model 4800 DryJect� machine can be leased
for approximately $550 per month per machine and the model 3000 DryJect�
machine can be leased for approximately $400 per month per machine from various
leasing companies.
Note 5.
Travel for Initial Training.
Costs for initial training are estimated to be $2,000
to $3,000. The Company estimates that the Franchise Owner and the first Manager
who will operate the Franchised Business will train for up to 5 business days
at our headquarters. The Company estimates costs of $150 per day, per person,
for lodging, food and other miscellaneous expenses, plus travel expenses.
Note 6.
Start-Up Supplies.
We estimate start-up supplies to cost between $500 and
$1,000. These supplies include the following: hose, gas cans, tools, filters,
etc. See the Operations Manual (the "Manual") for details.
Note 7. Legal
& Accounting Fees.
We estimate that your legal and accounting fees will
be $1,000 to $3,000. Legal fees will be paid by you, if appropriate, to retain
an attorney to help establish a legal entity for the Franchised Business. You
will also need to retain an accounting or payroll service to assist in keeping
necessary books and records of income and expenses.
Note 8.
Vehicle Lease Payments.
You must either purchase or lease a suitable 16 foot
truck to properly operate the Franchised Business. With acceptable credit, a
suitable truck may be leased for approximately $740 per month.
Note 9.
Office Equipment & Furniture.
We estimate that your office equipment and furniture
expenses to be $300 to $600. This equipment will consist of
printer/scanner/copier machine and cellular telephone.
Note 10.
Office Supplies.
We estimate the cost of your office supplies to be
$100 to $300. These office supplies will consist of pens, paper, stapler,
rubber bands, scotch tape, scissors, etc.
Note 11.
Insurance Deposit
We estimate that the insurance
deposit will be 25% to 50% of the first year''s premium, or $750 to $1,200. This
coverage includes general liability, auto coverage, fire, workmen''s
compensation, theft, property and contents.
Note 12.
Permits, Licenses and Fees.
We estimate that your permits,
licenses and fees will typically range from $100 to $300. Several business licenses may be needed by the
Franchise Owner to operate the Franchised Business. The costs of these business
licenses will vary from location to location.
Note 13.
Local Advertising Expenditures.
You must advertise in the local golf course
superintendent newsletters and attend local trade shows.
Note 14.
Additional Funds (Working Capital).
The estimate of additional funds is based on an
owner-operated business and does not include any allowance for an owner''s
salary. The estimate of $2,000 to $20,000 is for the first 3 months of business
operations. The Company estimates that, in general, you may expect to put
additional cash into the business during at least the first 3 months, and
sometimes longer, but we cannot estimate or promise when, or whether, you will
achieve a positive cash flow or profits. See Item 6 for an explanation of how
Service Fees and Marketing Fund contributions are calculated and paid.
Estimated
Initial Investment.
The figures and footnotes
listed above in this Item 7 of the Disclosure Document are estimates and we
cannot guarantee that you will not have additional expenses starting your
Franchised Business. This estimate does not include real estate costs. Your
costs will depend on factors such as: how well you follow our methods and
procedures; your management skills; your business experience and capabilities;
local economic conditions; the local market for our products and services; the
prevailing wage rates; competition; and sales levels reached during your
initial phase of business operations.
We relied on our experience in
the turf management industry in compiling these estimates. You should review
these figures carefully with a business advisor before making any decision to
purchase this franchise opportunity.
