ITEM 7
ESTIMATED INITIAL INVESTMENT
Except as otherwise
described in the notes below, the following table provides an estimate of your
initial investment and the costs necessary to begin operating a Franchised
Business. Actual costs will vary for each franchise location depending on a
number of factors including market condition, and the geographic location of
your Franchised Business.
+A11 fees and payments
are non-refundable, unless otherwise stated or permitted by the payee.
1 Franchise Fee. We
describe the Franchise Fee in greater detail in ITEM 5 of this Franchise
Disclosure Document.
2 Real Estate/Rent. You
must lease or otherwise acquire a suitable facility for the operation of the Franchised
Business. During your first year of operations, you will need a warehouse
facility with at least 5,000 to 10,000 square feet of space. As your business
grows, additional warehouse space may be needed as your business matures. It is
extremely difficult to estimate lease acquisition costs because of the wide
variation in these costs between locations. Lease costs will vary based upon
the square footage leased, the cost per square foot and required maintenance
costs. We assume that you will have to pay the first month''s rent upfront and
put down one month''s rent as a security deposit. The rent you pay is typically
not refundable, but your security deposit may be under certain circumstances.
3 Utility Deposits. Licenses,
etc. This estimate is for miscellaneous opening costs and expenses such as
installation of telephone, deposits for gas, electricity and other services,
business licenses, vehicular registrations, legal and accounting expenses for
your start-up period.
4 Leasehold Improvements.
To convert the existing facility into a UNITS Business, the facility must be
renovated according to our standards and specifications. The cost of leasehold
improvements will vary based upon size, condition and location of the premises,
local wage rates and material costs.
5 Insurance. Requirements
are described in greater detail in Section 15 of the Franchise Agreement.
Factors that may affect your cost of insurance include location of the
Franchised Business, value of the leasehold improvements, amount of inventory,
the number of employees and other factors. Certain authorities may mandate
additional insurance policies or higher policy limits. If so, you must comply
and this may increase your costs of insurance.
6� Initial Inventory. You
must purchase an initial inventory of packing and moving supplies such as
boxes, locks, furniture pads, hand trucks, mattress covers, packing paper,
hooks and rollers, uniforms, and other supplies and equipment. These costs will
vary based upon the size and location of the Franchised Business time of year
that you will begin operations, suppliers and other related factors.
7� UNITS Containers. You
must obtain from us an initial inventory of at least 52 modular, transportable,
self-storage containers which we have manufactured to our standards and
specifications ("UNITS Containers"), regardless of the size of your
territory. UNITS Containers are manufactured in two sizes, 8''x 12'' and 8'' x
16*, and constructed based on our proprietary designs and specifications. UNITS
Containers may only be obtained through us and the minimum quantity per order
is 12 containers. We recommend that you obtain at least 36 16'' UNITS Containers
and 16 12'' UNITS Containers. The low figure above estimates your cost to lease
the containers (including a 25% down payment plus one month of debt service),
while the high estimate reflects your estimated cost to purchase the required
number of UNITS Containers outright. If you choose to lease the containers, the
actual down payment may range from between 25% to 40% of the cost of the
containers. Presently, the cost to purchase an 8'' x 12'' UNITS Container is
$3,430.00, and the cost to purchase an 8'' x 16'' UNITS Container is $3,780.00.
You must pay for all freight costs associated with delivery of your containers.
We estimate your freight costs will range between $5,600 and $11,200. We
reserve the right to change the cost of containers and your purchasing
requirements periodically.
8� Lifts and Trucks. You
must purchase at least one forklift capable of carrying a minimum of 20,000
pounds. The forklift must be obtained through a pre-approved third party
supplier. In addition, you will need to purchase through us at least one
suitable vehicle to transport the containers and lift. The item above reflects
the estimated cost to lease one forklift and truck which meet our standards and
specifications.
9� Signage. This range
includes the cost of all signage used in the Franchised Business. You will need
to display 2 vinyl side panel signs on each UNITS container; the side panel
displays are the same size for both the 12'' and 16'' containers. You will also
need to obtain vinyl signs for each container that are used for identification
purposes. We provide you with our specifications for the placement of all
signage on containers, the premises of your warehouse facility and truck(s).
Your costs will vary based on your initial inventory of containers and trucks,
the size and location of the Franchised Business and local wage rates.
10������������ Information
Technology Equipment & Services. We have detailed and uniform
specifications for an IT
System which all UNITS Businesses must use in their operations. You must
purchase specific computer hardware and
software licenses. The low estimate in this range includes costs of required
equipment, hardware and software,
installation, setup, initial access fees and miscellaneous costs. The high
estimate reflects the possibility that you may
choose to install added features or an additional workstation. Our requirements
are disclosed in more detail in ITEM
11.
''1 Grand Onening.
You will be must spend a minimum of $ 10,000 on Grand Opening Advertising
during the first 3 months of operation, excluding your cost of yellow pages
advertising. You may choose to spend more.
12 Training. The cost of
initial training is included in the Franchise Fee, but you must pay for
transportation
and expenses for food and lodging while attending training. The total cost will
vary depending on the number of
people attending, how far you travel and the type of accommodations you choose.
13 Additional Funds. We
recommend that you have a minimum amount of money available to cover
operating expenses, including employees'' salaries and lease costs, for the
first 3 months that the Franchised Business
is open. However, we cannot guarantee that our recommendation will be
sufficient. Additional working capital may
be required.
14 Total. These estimates
are inclusive of the initial franchise fee. In compiling this chart, we relied
on our experience as a franchisor and our affiliates'' collective eight years of
experience in operating substantially similar businesses. The amounts shown are
estimates only, and may vary for many reasons including the size of your
Franchised Business, the capabilities of your management team, where you locate
your Franchised Business and your business experience and acumen. You should
review these estimates carefully with an accountant or other business advisor
before making any decision to buy a franchise. These figures are estimates
only, and we cannot guarantee that you will not have additional expenses in
starting the Franchised Business.
We do
not offer any direct or indirect financing. See Item 10 for more information.
