1 You will incur certain costs
In connection with complying with the franchise laws that may apply in your
Territory. In addition, Area Representatives in the State of Illinois, possibly
California and elsewhere, may be deemed to be subfranchisors, and, therefore
they must register the offering and sale of franchises in that state. You may
incur filing fees (for example, $500 in Illinois) in addition to fees for legal
services.
The Initial Fee may be
partially refundable. Please see Item 5 above for an explanation of the
circumstances.
2.
If
you do not own adequate office space, and you establish a formal office space
(which we recommend but do not require), you will incur certain rental costs
and deposits for that office space. This estimate assumes that you will rent an
office that has 400 to 900 square feet, at a rental rate of $12 to $30 per
square foot. The estimate assumes that you will pay six months'' rent.
3.
If
you do not already own them, you will need to acquire office equipment such as
a computer, fax machine, telephones and desks.
4.
You
must carry general liability and "errors and omissions" insurance.
See Item 8 for a detailed discussion of the insurance requirements.
5.
Miscellaneous
costs include business travel expenses, business meals and entertainment,
additional advertising, and office supplies in the first six months of your
business.
6.
We
make no representation or warranty regarding the period within which your
business will breakeven and or have positive cash flow, which may exceed six
months.
7.
As
described above in Item 1, we strongly recommend, but do not require, that you
have a Demonstration Store and a Certified Training Store at which you can
demonstrate the concept to prospective franchisees and train Franchisees. If
you do not have a Demonstration or Certified Training Store, you may incur
significant costs in paying others to utilize their Store for training purposes
and we can not estimate those costs.
8.
The
figures are estimates only and it is possible to significantly exceed costs in
any of the areas listed. We can neither predict nor guarantee that you will not
incur additional expenses in starting the business. Your costs will depend upon
factors such as how much you follow the our business methods and procedures;
the proximity, condition and success of your Demonstration and Certified
Training Store, your management skill, experience and business acumen; local
economic conditions; the local market for our products; the prevailing wage
rates; competition; the number of, and success of franchisees becoming
operational during the initial period; and the sales level reached during the
initial period. You should review these figures and all your assumptions
carefully with a business advisor before making a decision to become an Area
Representative.
The minimum total cost of $69,800 assumes you purchase
a 25 franchise territory at $2,000 each (for a total Initial Fee of $50,000).
The maximum may not include all expenses you Incur and does not Include the
cost of a Certified Training Store whose costs are set forth in Item 7 of the
current Store Circular.
