ITEM 7
YOUR ESTIMATED INITIAL
INVESTMENT BRONZE LEVEL
|
Expenditures
|
Estimated Amount
or Estimated Low-High Range
|
When Payable
|
Method
of Payment
|
Whether
Refundable
|
To Whom Paid
|
|
Initial Franchise Fee (1)
Initial Inventory
|
$12,000 $100
|
On signing
Franchise
Agreement
|
Lump
Sum
|
No
|
Us
|
|
Travel and Living Expenses
while
Training
(2)
|
$450-$ 1,000
|
During training
|
As
Incurred
|
No
|
Third Parties
|
|
Insurance (3)
|
$400-$600
|
Annually
|
As
Agreed
|
No
|
Insurers
|
|
Additional Funds (4)
|
$2,000-$4,000(4)
|
As Incurred
|
As
Incurred
|
No
|
Third Parties
|
|
TOTAL
ESTIMATED INITIAL INVESTMENT (5)
|
$14,950-$17,700
|
|
|
|
|
SILVER LEVEL
|
Expenditures
|
Estimated Amount
or Estimated Low-High Range
|
When Payable
|
Method of
Payment
|
Whether Refundable
|
To Whom Paid
|
|
Initial
Franchise Fee (1) Initial Inventory
|
$20,000 $250
|
On
signing
Franchise
Agreement
|
Lump
Sum
|
No
|
Us
|
|
Travel and Living Expenses
while
Training (2)
|
$450-$l,000
|
During training
|
As
Incurred
|
No
|
Third Parties
|
|
Insurance (3)
|
$400-$600
|
Annually
|
As Agreed
|
No
|
Insurers
|
|
Additional Funds (4)
|
$2,000-$4,000(4)
|
As Incurred
|
As
Incurred
|
No
|
Third Parties
|
|
TOTAL ESTIMATED INITIAL INVESTMENT (5)
|
$23,100-$25,850
|
|
|
|
|
GOLD LEVEL
|
Expenditures
|
Estimated
Amount
or
Estimated Low-High Range
|
When Payable
|
Method
of
Payment
|
Whether
Refundable
|
To Whom Paid
|
|
Initial Franchise Fee (1)
Initial Inventory
Area Representative Fee (1)
|
$30,000
$500 $10,000
|
On signing
Franchise
Agreement
|
Lump
Sum
|
No
|
Us
|
|
Travel and Living Expenses
while
Training (2)
|
$450-$ 1,000
|
During training
|
As
Incurred
|
No
|
Third Parties
|
|
Insurance (3)
|
$400-$600
|
Annually
|
As
Agreed
|
No
|
Insurers
|
|
Additional Funds (4)
|
$2,000-$4,000{4)
|
As Incurred
|
As
Incurred
|
No
|
Third Parties
|
|
TOTAL ESTIMATED
INITIAL INVESTMENT (5)
|
$33,350-$36,I00
|
|
|
|
|
Explanatory Notes.
1.
The curren! initial franchise fee is
$12,000.00 for the Bronze Level, $20,000 for Silver, and $30,000 for Gold,
payable in a lump sum in cash upon the signing of the Franchise Agreement. See
Item 5 for details. The initial franchise lee is refundable only under the
circumstances described in hem 5. As part of the initial franchise fee, wc
include an initial supply of Kinderdance Materials. For an additional payment
in the amount of''fen Thousand Dollars ($10,000.00) you can become our "Area
Representative" and be awarded additional development territory in
addition to the territory as described on the facing page and in Schedule Two
of your Franchise Agreement.
2.
Travel
and living expenses during training can vary greatly, depending on the distance
traveled to the training center, mode of transportation, type of
accommodations, and style of living.
3.
You
must maintain comprehensive general liability insurance with a limit of not
less than $1 million. An estimated annual premium for that insurance is $350.00
to $400.00. In addition, you must maintain automobile liability insurance with
a $500,000 combined single limit or a $250,000/$500,000 split limit, and
worker''s compensation or similar insurance as required by law on all employees.
Most franchisees already carry automobile liability insurance equaling or
exceeding the type required, or are able to upgrade their insurance to the type
required for an estimated annual cost of $100.00 to $200.00. An estimated
annual premium for worker''s compensation insurance is $45 to $450, based on
estimated premium rates of $.50 to $1.00 per $100 of salary paid.
4.
You
may need these additional funds to operate the franchised business during its
6-month initial phase to cover operating expenses which are in excess of
typical start-up revenues. These include expenses including marketing,
promotional, travel, office supply, teacher training, printing, camcorder and
telephone expenses, and monthly royalty and advertising fees. These figures arc
estimates, and we cannot guarantee that you will not have additional expenses
starting the 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.
5.
We
relied on our many years of experience in the Kinderdance Business to compile
these estimates. We have based our estimates on the assumption that you will
operate your Kinderdance Business from your home and will not need to lease
office space. If you choose to maintain a commercial office, we must approve
your proposed lease or purchase agreement and the appearance of the proposed
office. Many variables, including region, neighborhood, condition and size,
will affect the cost of a commercial office. You should review these figures
carefully with a business advisor before making any decision to purchase the
franchise.
