HANDYMAN MATTERS - FDD UFOC ITEM 7 Detail

ITEM 7

YOUR ESTIMATED INITIAL INVESTMENT

(1)               
See ITEM 5 for discussion on the Initial Franchise Fee. The Initial Franchise Fee may be greater than $30,000 if there are in excess of 125,000 people in your Territory. The Initial Franchise Fee for a Conversion Franchise is $4,000 less than for our regular franchise.

(2)                Training is tuition-free for up to three people, but you must pay for the expenses of attendance, including lodging, meals, transportation, and wages of trainees.

(3)                Your HANDYMAN MATTERS Business may be operated out of your home during the first two years. We have included estimates for the cost of opening an office outside of your home if you elect to open an outside office during the first two years. Assuming you elect to lease space outside your home during the first three months of operating your HANDYMAN MATTERS Business, a commercial lease normally requires payment of the first month''s rent, a security deposit and a rent deposit equal to one month''s rent. A lease deposit may or may not be refundable and lease deposits vary widely from location to location. (See ITEM 11.)

(4)                You can rent tools or you may find it cost effective to purchase various tools with a high use rate, including ladders of 22 feet in length or longer, a tub saw for tile, and a jackhammer. A detailed list of tools we recommend you should rent or purchase is included in our Operations Manual (defined in ITEM 8). We suggest that you not purchase a truck or other vehicle for use by your employees or contractors in their businesses. Instead, you should hire employees or contractors who already own vehicles for transporting their tools and equipment to the job site.

(5)                Includes a computer and software meeting our minimum specifications that you purchase from suppliers selected by you. You must purchase one workstation, one laser printer, one facsimile machine, a hub-router, network and wiring. You must have a high-speed Internet connection (where available). We give you access to our proprietary WebScheduler software, without an additional charge. We will also provide you with an e-mail account. The e-mail account is currently provided without an additional charge, but we reserve the right to charge a fee for providing the e-mail account or to discontinue providing the e-mail account. The standards and specifications we are currently utilizing are set forth in the Operations Manual. (See ITEM 11.)

(6)                You must spend a minimum of $3,500 and a maximum of $5,000 as a required Start-up Advertising expense in the period starting 30 days before opening, and continuing through the end of the second full month after opening of your franchise. This amount includes items that will last for a period of time, but are purchased in quantity based on price considerations.

(7)                Licensing laws and permit requirements, including fees, may vary from state to state and from city to city, depending on state and local laws. You must comply with these laws. (See ITEM 1.)

(8)                You must obtain the following types of insurance: a) workers compensation, b) general liability of $1,000,000 per occurrence and $2,000,000 aggregate with auto non-owned rider, c) fire and lightning, extended coverage, theft, vandalism and malicious mischief, flood, and sprinkler leakage for your Business Location and on all fixtures, equipment, supplies and other property used in the operation of your HANDYMAN MATTERS Business, for at least 80% of the cash value of the property, and d) "dishonesty" bond of $20,000.

(9)                This is an estimate of start-up expenses for an initial three-month period. These expenses do not include your living expenses or expenses if you decide to employ assistants. We have included an estimate for the costs you will incur during the first three months to employ the required CSR (as defined in ITEM 15 below). We estimate that you will pay your CSR an hourly rate of $12.00 to $16.00 per hour, for 30 hours per week, for each of the first 12 weeks of operation of your HANDYMAN MATTERS Business. Your costs will depend on factors such as 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 the sales level reached during the initial period.

(10)             The high/low total amounts are based on one franchise and will vary based on the Territory you purchase. The chart contains estimates only and we cannot guarantee that you will not have additional expenses starting your business. Your actual expenses may exceed our estimates. The information in the chart is not intended to imply that your HANDYMAN MATTERS Business will reach the breakeven point or any other financial goal by that time. We recommend that you have (or have access to) additional startup capital beyond the amounts shown in the table above.

(11)             We relied on over 10 years of experience of certain officers of the company in the handyman service business to compile these estimates. You should review these figures careftilly with a business advisor before making any decision to purchase the franchise.

(12)             The Initial Franchise Fee is refundable only in those circumstances set forth in ITEM 5 above. A lease deposit payment may or may not be refundable, as discussed in Note 3 of this ITEM. None of the other payments listed are refundable.