ITEM 7
ESTIMATED INITIAL INVESTMENT
You may incur the following
estimated initial expenditures when you begin operating as a Regional Master
Franchisee. Additional factors concerning each expenditure category are
described in the Notes following the chart.
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YOUR ESTIMATED
INITIAL INVESTMENT
|
|
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Type Of Expenditure
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Amount
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Method
Of Payment
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When Due
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To Whom Payment Made
|
|
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Initial Franchise Fee**
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$75,000
-$250,000
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Lump Sum
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At Signing
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Us
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|
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Real Estate (Note 1}
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$800� - $2,000
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As Arranged
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As Arranged
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Lessor
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|
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Initial Supplies
(Note
2)
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$1,500
-$2,000
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As Incurred
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As Incurred
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Suppliers
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|
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Equipment� {Note 3)
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$2,500 -$4,000
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As Arranged
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Before Opening
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Supplier
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|
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Business Licenses &
Permits, Deposits and Other Prepaid Expenses
(Note
4)
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$1,000
-$3,000
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As Incurred
|
As Incurred
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Suppliers
|
|
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Insurance (Note 5)
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$1,000
-$3,000
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As Arranged Installment
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Before Opening
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Insurance Carrier
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|
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Training (Note 6)
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$3,000
-$5,000
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As Incurred
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As Incurred
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Transportation Lines, Hotels
and Restaurants
|
|
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YOUR ESTIMATED INITIAL
INVESTMENT
|
|
Type Of Expenditure
|
Amount
|
Method.Of Payment
|
When Due
|
To Whom Payment Made
|
|
Legal Fees and Registration
Expenses� (Note
i)
|
$1,500
-$2,000
|
As Incurred
|
As Incurred
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Attorneys and State Regulators
|
|
Computer Hardware and Software
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$2,750 -$3,500
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As Incurred
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As Incurred
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Suppliers
|
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Initial
Advertising
Expenses
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$1,500 -$2,250
|
As Incurred ''
|
As Incurred
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Suppliers
|
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Working Capital -3 months (Note 8) ''
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$50,000 -$70,000
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As Incurred
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As Incurred
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Retained by You (Paid to Vendors and Employees)
|
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TOTALS
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$140,550 -$346,750
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**The initial franchise fee for
a Regional Master Franchise is described in Item 5. The minimum fee is $75,000.
We may, in our discretion, elect to finance a portion of the initial franchise
fee under certain situations. We do not finance any portion of the minimum fee
of $75,000. See Item 10.
Note 1:
You must maintain an appropriate business office of
approximately 1,500 - 2,000 square feet, which we must approve as to location
and decor, and you must conduct your Franchised Business from that office. The decor
of your office does not involve any extraordinary cost, other than customary
expenses. You may not operate a Regional Master Franchise from your home.
Initial deposits and the costs for the build-out of office space will vary,
depending on the office space leased.
Note 2:
This estimate includes the cost of your initial office
supplies and advertising package.
Note 3:
You must purchase, lease or provide proof of ownership
of a commercial vacuum cleaner, commercial carpet extraction machine,
commercial floor polisher and a commercial wet/dry vacuum and complete starter
kit. These items are not included in the equipment package we furnished. This
equipment is used as back-up equipment for your Unit Franchisees and you will
rent this equipment to your Unit Franchisees if necessary. In addition, this
estimate includes the costs for computer hardware required for the Franchised
Business. See Item 11.
Note 4:
You must obtain all proper business licenses and
permits from various state and local agencies before engaging in business.
These filing and application fees may range up to $500 each, depending on the
location of your Regional Master Franchise. Security deposits and other
expenses which must be prepaid will also vary substantially.
Before commencing operations,
you must purchase comprehensive liability insurance, including property, bodily
injury, product and automotive coverage. The cost of this coverage varies,
depending on the factors that include the charges established by the carrier,
terms of payment, and your prior history. You must also secure a commercial
cleaning service bond for yourself and your employees. You must obtain
insurance in the following minimum amounts and provide proof of coverage on
demand:
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Type
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Minimum Limits
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Commercial Cleaning Service Bond
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$50,000
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Comprehensive General Liability
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$2,000,000
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Worker''s Compensation
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"Statutory
Benefits"
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These coverages must include
completed operations and products coverage with an extended property damage
endorsement for building services contractors, may be increased or have new
types of coverage added at our discretion when circumstances so dictate, or
when the laws of your home state so dictate.
Note
6:
You must pay any expenses incurred to receive your
initial training at our corporate training center in Alpharetta, Georgia or at one of our Regional Master Franchisee''s offices. Actual costs will depend on
the distance traveled, the lodging secured, meals and the type of
transportation used.
Note
7: .
You must use our standard form of Unit Franchise
Disclosure Document and Unit Franchise FDD that we will provide to you for your
sale of Unit Franchises. You must prepare, revise and add information regarding
you and your position as a Regional Master Franchisee for the Company in your
Unit Franchise Disclosure Document, at your expense, to include all applicable
disclosures. You are also responsible for complying with all local franchise
regulation/registration laws and the payment of all registration and filing
fees at your expense. You may require the services of an attorney to assist
you.
Note 8:
You must have access to funds
for working capital in the approximate amount of $50,000 to $70,000 for
operation expenses during the initial 3 months of operation. The actual amount
of your initial expenses will vary, based on geographic and economic
conditions. This amount is an estimate and we cannot guarantee that you will
not have additional costs in operating your Regional Master Franchise. Your
costs will depend upon your management skill, experience and business acumen,
local economic conditions, the prevailing wage rate, competition and your Gross
Monthly Revenue during this period.
THERE ARE NO OTHER DIRECT OR
INDIRECT PAYMENTS IN CONJUNCTION WITH THE PURCHASE OF THE FRANCHISE.
