1.
See Item 5.
2.
This
estimate is for the cost of locating a Site for the Store and designing and
constructing a Store ranging in size from 1,000 square feet to 3,000 square
feet located in a storefront, strip shopping center, or regional mall. Your
costs will vary depending on the nature of the leasehold improvements, the
condition of the leased premises, the size of your Store, the Store''s location,
the cost of hiring architects and contractors, market conditions, your
landlord''s construction allowance, and whether you incur brokerage costs. The
amount also includes the purchase of the heating, ventilating, and/or air
conditioning systems for the Store. This estimate includes prepaid rent and
deposits payable to the landlord, but does not include annual rent. Your annual
rent will be dependent upon factors such as the size and type of location
(storefront, strip center, or shopping mall) and market conditions.
3.
This
estimate includes the cost of furniture, fixtures, crating, merchandising
supplies, and equipment used In the Store.
4.
This
estimate includes the cost of purchasing our required computer hardware,
software, inventory control system and point of purchase system from approved
suppliers. You must also provide the Internet connections that we specify.
5.
Signage
includes Shoebox New York identification on the Store, displays, and signage
throughout the Store.
6.
The
minimum opening inventory is set by NexCen Management, on behalf of us, based
on its assessment of your projected sales and inventory turnover. You must
obtain all of your minimum opening inventory from approved suppliers. Amounts
shown do not include shipping costs.
7.
This
estimate is for the cost of attending initial training in Norcross, Georgia. We provide instructors, facilities, and materials for the initial training
program at no charge. You are responsible for the travel and living expenses,
wages, and other expenses incurred by your trainees during initial training.
The actual cost will depend on your point of origin, method of travel, class of
accommodations, and dining choices.
8.
You
must spend a minimum of $5,000 for grand opening advertising and promotion in
the two weeks prior to opening your Store and the four weeks after opening the
Store. Your cost may be higher based on the length of time you wish to run
opening promotions. We may require you to pay this amount to us if we engage
and pay a third party to provide services related to your Store''s grand opening.
This estimate does not include the Marketing Fees that you must pay us for the
Marketing Fund described in Item 11.
9.
This
estimate is for the cost of a deposit necessary to obtain the minimum required
insurance. You will need to check with your insurance carrier for actual
premium quotes and costs, as well as for actual amount of the deposit. The cost
of coverage will vary based upon the area in which your business will be
located, your experience with the insurance carrier, the loss experience of the
carrier, the amount of deductibles and of coverage, and other factors beyond
our control. You should also check with your insurance agent or broker
regarding any additional insurance that you may wish to carry above our
required minimums.
10.
This
estimate is for the cost of engaging an attorney, accountant, or other business
advisors to assist you in reviewing this Disclosure Document, the Franchise
Agreement, the Area Development Agreement, your business plan, and any other
contracts that you enter related to this Franchise. We may require that you
engage an attorney to review your lease or purchase agreement for the accepted
Site and supply us with reasonable documentation in connection with such
review, including a lease abstract and confirmation that (i) the Lease Rider has been
signed (if you lease the Site) and (ii) the terms in the agreement accurately reflect the
terms in any letter of intent between you and the third party seller or lessor.
We strongly recommend that you seek the assistance of professional advisors
when evaluating this Franchise opportunity. The estimates represented in this
chart are based on professional fees in the State of Georgia. You may
experience different rates for professional fees in your market. It is best to
ask your professional advisors for their fee schedule prior to engaging them to
perform any services on your behalf.
11.
This
estimate includes the cost of licenses and permits and utility deposits
necessary to open your Store. You are responsible for maintaining all required
licenses and permits necessary to build and operate your Store. You should
check with local authorities, an attorney, or a business consultant to
determine what licenses and permits are necessary at your location.
12; This is an estimate of the
amount of additional operating capital that you may need during the first three
months after opening your business. This estimate includes additional funds you
may need to pay employee salaries and wages, payroll taxes, utilities, such
items as payroll taxes (including payroll to cover the pre-opening training
period for your staff), Royalty Fees, Marketing Fees, legal and accounting
fees, additional advertising, health and workers'' compensation insurance, bank
charges, miscellaneous supplies and equipment, staff recruiting expenses, state
tax and license fees, deposits, prepaid expenses, and other miscellaneous
items. The preceding list is by no means conclusive of the extent of possible
categories of expenses. The expenses you incur during the start-up period will
depend on factors such as local economic and market conditions, your business
experience, and the level of traffic at your location. We cannot guarantee that
you will not incur additional expenses in starting the business that may exceed
this estimate or that you will not need additional funds after your first three
months of operation. It is best to contact your accountant or financial advisor
for further guidance.
13. This total amount is based
upon our affiliates'' market research and experience opening and operating other
retail stores. Your costs may vary based on a number of factors including, but
not limited to, the geographic area in which you open, local market conditions,
and your skills at operating a business. We strongly recommend that you use
these categories and estimates as a guide to develop your own business plan and
budget and investigate specific costs in your area. You should independently
investigate the costs of opening a specialty retail footwear store in the
geographic area in which you intend to open a Store. You should also review the
figures carefully with a business advisor before making any decision to
purchase the Franchise. We do not provide financing to franchisees either
directly or indirectly in connection with their initial investment
requirements. The availability and terms of financing obtained from third
parties will depend upon such factors as the availability of financing, your
credit worthiness, collateral which you may make available, or policies of
local lending institutions with respect to the nature of the business.
