PETLAND - FDD UFOC ITEM 7 Detail
ITFM 7.
FSTIMATFD INITIAL INVFSTMFNT
YOUR FSTIMATFn INITIAI INVFSTMFNT FOR A STCIRF llKin.FR fi 000 SQIIARF FFFT
typf of fxpfnoitiirf
INITIAL
FRANCHISE FEE
REAL PROPERTY
FURNITURE, FIXTURES, EQUIPMENT
AND P.O.S. SYSTEM (Note 3)
REMODELING, LEASE�HOLD
IMPROVEMENTS AND DECORATING COSTS (Note 4)
INVENTORY REQUIRED TO BEGIN
OPERATION (Note 5)
UTILITY SECURITY DEPOSITS
(Note 6)
LEASE DEPOSIT (Note 7)
ADVERTISING ASSOCIATED WITH
STORE OPENING (Note 8)
GENERAL LIABILITY, CASUALTY
AND OTHER INSURANCE AS REQUIRED UNDER SECTION 24 OF THE FRANCHISE AGREEMENT
(Note 9)
amount
$30,000 (Note 2)
$187,500-$283,000
$137,500-$336,500
$90,000-$125,000
$0-$8,000
$0-$18,000
$15,000-$20,000
$5,000-$10,000
Method
of Payment
(Note 1)
(Note 2)
Progress payments or lump sum
Progress payments
Lump sum
Lump sum or bond
Lump sum Lump sum
Lump sum
whfn Duf
(Notel) (Note 2)
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
To Whom
Payment is
to.
RF MAliF
Petland
(Note 2)
Petland or
approved
supplier(s)
Petland or supplier
Designated or
approved
supplier(s)
Utility provider
Landlord
Designated or
approved
suppliers
Insurance company
 ADDITIONAL
FUNDS 3 MONTHS (Note 10)
TRAVEL, ROOM AND BOARD TO
ATTEND INITIAL TRAINING PROGRAM (depending on distance to Ohio) (Note 11)
$65,000-$115,000
$500-$3,000 (per person)
As incurred
As incurred
As incurred
Before scheduled store opening
Various
Various
 
typf of fxpfnoiture
STORE DESIGN, FIXTURE
COORDINATION, and CONSTRUCTION SERVICES FEE (Note 12)
INITIAL MERCHANDISE
PLANOGRAMS, MERCHANDISING & P.O.S. SETUP, AND DETAIL BAR CODING (Note 13)
ON-SITE TRAINING TEAM (Note
14)
LICENSES AND
FEES {Note 15)
UNIFORMS TOTAL
Method
of paymfnt
Lump sum
Lump sum
Lump sum $500-$1,500�� Lump sum
Lump sum
$1,000-$2,500
$559,500-$989,500
When Puf
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
to whom payment is
to be Made
Petland
Petland
Petland
Governmental
entities
Uniform supplier
YOUR
FSTIMATFn INITIAI 1NVFRTMFNT FOR RTORFR fi,0n0.7,000 RQ1IARF FFFT
Item
INITIAL FRANCHISE FEE
REAL PROPERTY
FURNITURE, FIXTURES, EQUIPMENT
AND P.O.S. SYSTEM (Note 3)
REMODELING, LEASE�HOLD
IMPROVEMENTS AND DECORATING COSTS (Note 4)
INVENTORY REQUIRED TO BEGIN
OPERATION (Note 5)
UTILITY SECURITY DEPOSITS
(Note 6)
LEASE DEPOSIT
(Note 7)
ADVERTISING ASSOCIATED WITH
STORE OPENING (Note 8)
Amount
$30,000 (Note 2)
$285,000-$313,000
$225,000-$350,000
$18,000-$25,000
Method
of
paymfnt
(Notel) (Note 2) Progress
payments or lump sum
Progress payments
WHFN nuF
(Notel) (Note 2)
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
To Whom
Payment is to. rf Maof
Petland
(Note 2)
Petland or
approved
supplier(s)
Petland or
supplier
Designated or
approved
supplier(s)
Utility provider
Landlord
Designated or
approved
suppliers
 
GENERAL LIABILITY, CASUALTY
AND OTHER INSURANCE AS REQUIRED UNDER SECTION 24 OF THE FRANCHISE AGREEMENT
(Note 9)
ADDITIONAL FUNDS-1 to 3 MONTHS (Note 10)
TRAVEL, ROOM AND BOARD TO
ATTEND INITIAL TRAINING PROGRAM (depending on distance to Ohio) (Note 11)
STORE DESIGN, FIXTURE
COORDINATION, AND CONSTRUCTION SERVICES FEE (Note 12)
INITIAL MERCHANDISE
PLANOGRAMS, MERCHANDISING & P.O.S. SETUP, AND DETAIL BAR CODING {Note 13)
ON-SITE TRAINING TEAM (Note
14)
LICENSES AND FEES (Note 15)
UNIFORMS TOTAL
$5,000-$15,000
$65,000-$130,000
$500-$3,000 (per person)
$10,000 $12,000
$10,000 $15,000
$15,000-$20,000
$1,000-$2,000
$1,500-$3,000
$791,000-$1,130,000
method of paymfnt
Lump sum
As incurred
As incurred
Lump sum
Lump sum
Lump sum Lump sum Lump sum
TO WHOM
Payment
is to rf Marf
Insurance
company
As incurred
Before scheduled Various store
opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
YOUR FftTIMATFn INITIAI INVFSTMFNT FOR RTORFR I AROFR TUA M 7,nnn RQIIARF FFFT
item
INITIAL FRANCHISE FEE
REAL PROPERTY
FURNITURE, FIXTURES, EQUIPMENT
AND P.O.S. SYSTEM (Note 3)
Amount
$30,000 {Note 2)
$325,000-$428,000
Method
of Payment
(Notel)
(Note 2)
Progress payments or lump sum
WHFN Pi IF
(Notel) {Note 2) Before
scheduled store opening
to whom
Payment
is to be Made
Petland
(Note 2)
Petland or
approved
supplier(s)
  
REMODELING, LEASE�HOLD
IMPROVEMENTS AND DECORATING COSTS (Note 4)
INVENTORY REQUIRED TO BEGIN
OPERATION (Note 5)
UTILITY SECURITY DEPOSITS
(Note 6)
LEASE DEPOSIT (Note 7)
ADVERTISING ASSOCIATED WITH
STORE OPENING (Note 8)
GENERAL LIABILITY, CASUALTY
AND OTHER INSURANCE AS REQUIRED UNDER SECTION 24 OF THE FRANCHISE AGREEMENT
(Note 9)
ADDITIONAL FUNDS-1 to 3 MONTHS (Note 10)
TRAVEL, ROOM AND BOARD TO
ATTEND INITIAL TRAINING PROGRAM (depending on distance to Ohio) (Note 11)
STORE DESIGN, FIXTURE
COORDINATION, AND CONSTRUCTION SERVICES FEE (Note 12)
INITIAL MERCHANDISE
PLANOGRAMS, MERCHANDISING & P.O.S. SETUP, AND DETAIL BAR CODING (Note 13)
ON-SITE TRAINING
TEAM
(Note 14) $300,000-$475,000
$175,000-$225,000
$0-$12,000
$0-$25,000
$18,000- $25,000�� Lump sum
$5,000-$15,000���� Lump sum
$65,000-$150,000
$500-$3,000 (per As incurred
person)
$10,000-$12,000
$10,000-$15,000
$15,000-$20,000��� Lump sum
To Whom
payment
is
to
be Made
Before���������������� Petland
or
|
Designated or
approved
supplier(s)
Utility provider
|
scheduled store supplier
opening
Before
scheduled store opening
Before
scheduled store opening
Before
|
Designated or
approved
suppliers
Insurance
company
|
scheduled store opening
Before
scheduled store opening
Before
scheduled store opening
As incurred Various
Before Various scheduled store
opening
Before
scheduled store opening
Before
scheduled store opening
Before
scheduled store opening
LICENSES AND FEES (Note 15)
UNIFORMS
$1,000-$2,000
$1,500-$3,000
Method
of Payment
Lump sum
Lump sum
Before
scheduled store opening
Before
scheduled store opening
To Whom
Payment is to be Made
Governmental entities
Uniform supplier
TOTAL
$956,000-$1,440,000
YOUR FSTIMATFn initiai INX/FRTMFNT FOR a
COKIVFRfilON
OF AM FXIfiTINfi RFTAII STORF
Itfm
INITIAL FRANCHISE FEE
REAL PROPERTY
FURNITURE, FIXTURES, EQUIPMENT
AND P.O.S. SYSTEM (Note 3)
REMODELING, LEASE�HOLD
IMPROVEMENTS AND DECORATING COSTS (Note 4)
INVENTORY REQUIRED TO BEGIN
OPERATION (Note 5)
ADVERTISING ASSOCIATED WITH
STORE OPENING (Note 8)
GENERAL LIABILITY, CASUALTY
AND OTHER INSURANCE AS REQUIRED UNDER SECTION 24 OF THE FRANCHISE AGREE�MENT
(Note 9)
ADDITIONAL FUNDS - 1 to 3
MONTHS (Note 10)
TRAVEL, ROOM AND BOARD TO
ATTEND INITIAL TRAINING PROGRAM (depending on distance to Ohio) {Note 11)
Amount
$15,000
(Note 2)
$20,000-$300,000
$0-
$150,000
$50,000-$100,000
$8,000-$20,000
$5,000-$10,000
$15,000-$75,000
$500-$3,000 {per person)
Method
of Payment
(Notel)
(Note 2)
Progress payments or lump sum
Progress
payments
Lump sum
Lump sum
Lump sum
As incurred
As incurred
WHFN DlIF
(Notel) (Note 2)
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
Before scheduled store opening
As incurred
To Whom
Payment is to be Made
Petland
(Note 2)
Petland or
approved
supplier(s)
Petland or
supplier
Designated or
approved
supplier(s)
Designated or
approved
suppliers
Insurance
company
Various
Item
whfn
diif
To Whom
Payment is to be made
CONSTRUCTION AND FIXTURE
COORDINATION (Note 12)
$0-$12,000 Lumpsum
Before scheduled store opening
Petiand
INITIAL MERCHANDISE������
$7,000 -PLANOGRAMS, $10,000 MERCHANDISING & P.O.S. SETUP, AND DETAIL BAR
CODING (Note 13)
Lump sum
Before scheduled store opening
Petiand
ON-SITE TRAINING TEAM
$1,500-(Note14) $10,500
Lump sum
Before scheduled Petiand store
opening
UNIFORMS $1,000-
$3,000
Lump sum
Before scheduled Uniform
supplier store opening
All figures in Item 7 are
estimates only. Actual costs vary for each franchisee and each location
depending on a number of factors.
Note 1: See Item 5 of this
Disclosure Document for additional information about the Initial Franchise Fee.
The Initial Franchise Fee is not refundable.
Nnte ?■ Your investment in
your store location will depend on the size of your store and whether you lease
or purchase the premises. Most Franchisees operate in leased space. The typical
Petiand store should have between 4,000-10,000 square feet if space is located
in an outdoor shopping center. If you purchased a building, the cost of
purchasing a building that is adequate to house a Petiand store varies widely
with the size and location of the building and market conditions. If you lease
space, cost of rent associated with a lease depends upon factors as market
conditions, available space, and the location of the premises. You will have to
pay base rent and in some instances pay a percentage of your Gross Revenues
depending upon the policies and practices of the landlord. In addition,
security deposits may be required which are typically 1 or 2 months of rent.
You may also be responsible under the lease for real estate taxes, maintenance
and repair expenses; utilities, common area charges, and insurance for the shopping
center. Rent payments usually begin on the first day of the month of operation.
Base rent for a store under 5,000 square feet is usually $4,250 to $8,750 per
month; $8,750 to $9,917 per month for a store 5,000-7,000 square feet: and
$9,917 to $14,166 for a store larger than 7,000 square feet. Rent changes are a
part of on�going expenses not included in initial expenses. Real property
payments are made to the landlord or seller of the premises and are generally
not refundable.
Note 3: The amount of your
investment in furniture, fixtures, and equipment will vary depending upon the
size of your store and the types of furniture, fixtures, and equipment
selected. It also includes the Petiand standard P.O.S. (point of sale) system.
These payments to Petiand or approved supplier(s) are not refundable. Payments
to Petiand are due upon receipt of our invoice, and, in any event, before your
scheduled store opening.
Nnte 4: The amount of your
investment attributable to remodeling expenses, leasehold improvements, and
decorating costs will vary depending on what work is required in the approved
store premises. Progress payments are usually required to Petiand or suppliers
and are not refundable. Payments to Petiand are due upon receipt of our
invoice, and, in any event, before your scheduled store opening.
Note 5- The amount of your
investment attributable to the initial store inventory will vary depending upon
the size of your store. These payments to your suppliers are refundable only as
negotiated between you and the suppliers. Payments are due according to the
suppliers'' policies and requirements. See Item 8.
Note fi: Utility security deposits
vary depending upon location and size of your store and are typically based
upon the utility provider''s estimate of 1 month''s usage. These amounts may be
refundable.
Note 7- As a part of lease
negotiations, lease deposits are not always required. If a lease deposit is
required it is generally limited to 1 or 2 month''s rent. The first month''s rent
is sometimes required in advance at the time of lease execution. The lease
deposit is refundable according to the terms of your lease.
Note ft: You must pay approved third
parties for store opening advertising. These costs are not refundable,
Noie_9: Insurance costs vary
in different localities. The estimate is for 1 year of liability insurance
coverage. You will incur expenses for workers'' compensation for your employees.
We are unable to estimate amounts that you may be required to spend for
workers'' compensation insurance. The requirements and rates vary widely from
place to place. These amounts are generally not refundable. An on-going monthly
allowance for insurance will appear on your Profit & Loss Statement since
this expense is ordinarily an ongoing obligation. We show it here because you
often pay 3 months to 1 year in advance.
Nnte m: This is an estimate only of
the range of initial start-up expenses that you may incur, including amounts to
pay for salaries and wages, withholding taxes, utilities, other taxes, and
ordinary costs of doing business. The actual amount of additional funds that
you will need depends upon a variety of factors, including your own management
skill, economic conditions, competition in your area, and other factors. The
estimate of additional funds is based on an owner-operated business and does
not include allowance for an owner''s draw. The estimate is for 1 to 3 months.
We estimate that, in general, a franchisee can expect to put additional cash
into the business during the first 1 to 6 months, and sometimes longer, but we
cannot estimate or promise when, or whether, any individual franchisee will
achieve positive cash flow or profits. These amounts are held in your
possession for you to retain any unused portion.
Note 11: You must bear all travel,
lodging, meals, and incidental expenses incurred during training for yourself
and any of your employees participating in training. These expenses are not
refundable.
Note 12: Construction and fixture
coordination is usually handled by Petland personnel and includes coordinating
architectural services, a general contractor, a construction contract,
installation of furniture, fixtures, equipment, store decor and signage. For
Conversion Stores, the scope of work and completion date will be agreed to
prior to signing the Franchise Agreement. These amounts are not refundable.
Nnte 13: Initial store merchandising
and set up costs are payable to us at least 7 days before the store opening.
This cost is not refundable.
Note 14: On-site training includes 45
hours of staff training during the week prior to opening, and up to 120 hours
after opening. The Petland operations and training team determines the schedule
of required staff. This expense does not fully cover our costs, but helps
defray the cost of this service and related travel. Training for Conversion
Stores may be modified, depending on the experience of the conversion
franchisee and its staff, and other factors. This amount is not refundable.
Note 15: You must comply with all
federal, state, and local laws, including, but not limited to, the acquisition
and maintenance of all licenses and/or certificates required for the
construction and/or operation and/or lease of your store. These costs and fees
will vary depending upon the location and size of the facility and are payable
to the governmental entity requiring payment of these fees, generally before
opening. These costs and fees are not refundable.
Petland may, at its sole
discretion, offer financing to you for amounts of your initial investment due
to be paid to us. In cases where you purchase an existing Petland store from
us, we may finance a portion of your purchase. As of the date of this
Disclosure Document, the annual interest rate charged for this financing is the
Wall Street Journal prime rate plus 4 basis points. The current term of
financing ranges from 1 to 10 years. The amount of loan repayments will vary
depending upon the amount borrowed, the term of the obligation and the
applicable interest rate. See Item 10 of this Disclosure Document for additional
information about financing.
Petland relied on its 30 years
of experience in franchising retail pet stores in compiling these estimates.
You should review these figures carefully with a business advisor before making
any decision to purchase a franchise.
|
