ITEM 7
ESTIMATED INITIAL INVESTMENT
|
YOUR
|
ESTIMATED
I
|
NJITIAL INVESTMENT
|
|
Type
of Expenditure
|
Amount or Range
|
Amount or Range
|
Method
of Payment
|
When Due
|
To Whom Paid
|
|
Franchise Fee
|
$25,000
|
$25,000
|
Lump sum
|
When Franchise Agreement is
signed
|
Home Video
|
|
Main Equipment, Supplies and Training
|
$84,900
|
$169,900
|
Lump sum
|
When Franchise Agreement is
signed
|
Home Video
|
|
Other Equipment and Fixtures
|
$500
|
$2,500
|
As required by payee
|
Prior to opening
|
Vendor
|
|
Office Equipment
|
$250
|
$4,000
|
As required by payee
|
Prior to opening
|
Vendor
|
|
Initial
Advertising And Promotion
|
$5,000
|
$10,000
|
As required by payee
|
At opening
|
Newspaper, Direct mail,
Advertising
|
|
Working Capital for three months
|
$5,000
|
$15,000
|
Lump sum
|
At opening
|
Opening expenses, Payroll,
Set�up Fees, Etc.
|
|
�TOTAL
|
$120,650
|
$226,400
|
|
|
|
The fee for the initial
training is included in the Franchise Fee. Your travel and living expenses for
training are paid by you.
There are no
signage fees.
As indicated above, the
amounts set forth are only estimates and may vary for many reasons, including
the reasons set forth above. The amount of your initial investment will vary,
depending primarily on the type and size of your franchise.
To commence retail sales at
the Franchise Operation if you rent the premises, some security deposits and
other expenses may have to be paid by you. Such expenses are often encountered
in connection with your, insurance requirements and telephone arrangements and
are usually determined by the landlord and supplier of those utility, telephone
and insurance services. The amount of such expenses will vary according to the
particular circumstances of your location. Initially, while revenues are being
generated, you will need funds (working capital) to meet his expenses as they
come due. It is estimated that between $5,000 and $15,000 of working capital
will be needed to operate your franchise for the first three months.
You should also expect certain
permits and licenses will be"required by various governmental authorities
including, but not limited to, health departments, fire departments, agencies,
labor departments, zoning and sales tax bureaus. The prospective Franchise
should investigate which permits are required before entering into the
franchise agreement. The fees for such permits and licenses are determined by
governmental authorities and generally are paid directly by you to said
authorities.
Prospective Franchise''s should
contact qualified professionals such as real estate brokers, bankers,
accountants, attorneys, insurance brokers and business consultants to obtain an
estimate of these expenses.
The factors, basis and
experience Home Video used in calculating the numbers in this item 7 are the
information obtained by Home Video in the franchise business during its
existence.
