Item 7. ESTIMATED INITIAL
INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT
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Type of Expenditure
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Amount (Low - High Range)
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Method of Payment
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When Due
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To
Whom Payment is to be Made
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Initial Franchise Fee Conversion Store
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$34,000 to $44,000(1) $5,000
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Lump Sum
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$5,000�� upon�� signing Area
Reservation Deposit Agreement; Balance upon signing Franchise Agreement
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Us
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Travel & Living Expenses While Trairiing
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$1,500(2)
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As Incurred
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As Incurred
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Airlines, Hotels &
Restaurants
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Real Estate
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(Note 3)
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As Arranged
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As Arranged
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Landlord
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Leasehold Improvements
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$11,000 to $22,000(4)
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As Arranged
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Prior to Opening
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Landlord or Contractors
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Miscellaneous Opening Costs
(Security & Utility Deposits, Incorporation Fees, etc.)
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$1,800 to $3,000
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As Arranged
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Prior to Opening
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Landlord, Utilities, Attorneys & Accountants
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Equipment, Fixtures &
Software
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$45,950 to $62,200<5>
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As Arranged
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Prior to Opening
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Us & Vendors
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Signs
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$4,000
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As Arranged
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As Arranged
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Vendor
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Opening Inventory
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$100,000 to $175,000
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As Arranged
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As Received and Billed by Us or Vendors
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Us and Vendors; Not
Refundable
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Insurance
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$1,800 to $2,000(6)
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Installment
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As Arranged
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Insurance Company
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Grand Opening and Advertising for One Month
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$3,000 to $7,000
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As Incurred
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First Month of Operation
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You Determine
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Type of Expenditure
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Amount (Low - High Range)
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Method of Payment
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When
Due
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To Whom Payment is to be Made
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Additional Funds - 6 Months
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$50,000 to $125,000(7)
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As Incurred
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As
Incurred
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Employees, Utilities &
Miscellaneous
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Miscellaneous Items
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$1,000 to $3,500
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As Incurred
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As
Incurred
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You Determine
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TOTAL
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$254,050
TO $449,200 m (Does not include real estate costs)
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|
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Notes
(1)������ Initial Franchise
Fee
The initial Franchise Fee will
vary depending on the type of Territory selected by you:������ Type I Market -
$44,000
Typen Market - $39,000 Type HI Market - $34,000
If you enter into a Territory
Development Agreement for a Type I or Type II Market, you must pay a Franchise
Fee of $54,000 or $49,000, respectively. For each additional Store location,
whether in the
traditional
single Store Territory or the Development Territory, you must pay an additional
$10,000 per location. If you are converting a currently open store to a
franchise Store, you must pay the conversion store franchise fee of $5,000.
Franchise Fees are not refundable.
(2)
Travel
and Living Expenses While Training
You must arrange
transportation and pay the expenses for meals and lodging for any persons
attending the training program. The amount of such estimated expenses will
depend on the distance you must travel and the type of accommodations you
choose. The estimate shown is for one person attending the training program
(3)
Real
Estate
Our Stores are located in
shopping centers in suburban areas. Rent is estimated to range from between $15
to $30 per square foot per year depending on factors such as size, condition
and location of the leased premises.
(4)
Leasehold
Improvement
The cost of construction and leasehold improvements
depends upon the size and condition of the premises, the local cost of contract
work and location of the Store. Our estimate is based on $4.40 per square foot,
from white box or vanilla shell.
(5)
Equipment,
Fixtures and Software
This estimate includes purchase and installation of
custom and standard fixtures, swing analyzer, club repair equipment, computer
hardware, software, support and licensing and equipment in compliance with the
Golf USA� interior design. This estimate will vary depending on whether the
golf swing computer analyzer is selected for use in your Store. Software,
support and licensing costs in the amount of $7,200 for 3 years are included in
this amount This represents the cost for the
first 3 years of your use of the software, support and
licensing. Thereafter, we estimate that the cost per year will be S1,800. This
includes 2 site licenses, additional licenses are available at a cost of $50
per month. Some of the fixtures included in this estimate must be purchased
from us. Other equipment may be purchased from us at your discretion. The cost
of equipment and fixtures will vary from this estimate for Conversion Stores
based on the equipment and fixtures already in place in the Store. Amounts paid
to us are not refundable.
(6)
Insurance
You must carry insurance
coverage for general public liability with a $2,000,000 aggregate limit and
workers'' compensation insurance in an amount sufficient to meet local statutory
requirements. Insurance rates vary from Territory to Territory. Therefore, you
are advised to contact your local agent for an estimate of the premium rates
for the designated insurance coverage.
(7)
Additional
Funds - 6 Months
The amount of the additional
funds is projected as sufficient to cover fixed expenses for 6 months of
operations based on seasonal variation. However, we do not warrant or guarantee
that this amount will be sufficient.
(8)
Total
Initial Investment
This estimates your total
range for initial startup expenses for a single Store Territory. These expenses
include payroll costs. These figures are estimates, and we cannot guarantee
that you will not have additional expenses starring the business. Your costs
will depend on factors such as local costs of personnel, construction,
insurance rates for your area, and the extent you plan to work in the Store. We
relied on our 21 years of experience in the retail golf store business to
compile these estimates. However, you should review these figures carefully
with a business advisor familiar with the various costs in your geographical
area before making any decision to purchase the franchise.
