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Franchise Costs: Detailed Estimates of Pandora Franchise Costs (2017 FDD)

by Franchise Chatter on June 24, 2013

in Franchise Costs, Jewelry Store Franchise, Retail Franchise

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Pandora Jewelry Customer Photo by Fiona McKean Photography

This post was updated on September 11, 2017 to reflect information from Pandora’s 2017 FDD (Item 7).

Detailed Estimates of Pandora Franchise Costs Based on Item 7 (Estimated Initial Investment) of Pandora’s 2017 Franchise Disclosure Document

  • The discussion below describes the estimated minimum requirements for beginning operations for a Pandora Store. The estimated minimum requirements may vary depending on factors such as your financial condition, your financing arrangements, and the business decisions you make.

1.  Leasehold Improvements:  $80,000 to $250,000

  • The cost of leasehold improvements will vary depending upon the type of location, condition of the premises, the terms of your lease, and whether your landlord pays a portion of the leasehold improvements (and, if so, whether your landlord charges those amounts back to you in your lease payment).

2.  Design Fees:  $10,000 to $18,000

  • You will purchase an initial design pack for your Store from either Little Diversified Architectural Consulting or Architectural Group International (as Pandora will specify) for approximately $4,000.
  • The initial design pack is not a registered architectural set from which your Store can be built. You will need to hire your own architect to fit the initial design pack drawings to your space and to create registered architectural sets from which any necessary build out can be built, at an additional estimated cost of $6,000 to $14,000.
  • The estimate above includes both costs.

3.  Fixtures:  $53,000 to $115,000

  • This is the estimate for your fixtures such as all displays, flooring, and non-custom signage. The invoice amount for the fixtures ranges from $106,000 to $214,000, however, you will receive a discount and pay only 50% of the invoice amount.

4.  Lighting and Flooring:  $20,000 to $30,000

5.  Display Accessories:  $2,000 to $6,000

  • This estimate for display accessories includes merchandising materials such as trays, earring trees, ribbon pillows, product holders, and wall graphics, among others.

6.  Fixture Installation and Shipping Costs:  $10,000 to $20,000

7.  Custom Signage:  $5,000 to $12,000

8.  Training Attendance Costs and Expenses:  $3,000 to $5,000

  • Pandora does not charge you a fee for the Training Program. However, you must bear all travel costs and expenses associated with your and your Store Manager’s attendance at the initial Training Program for new franchisees.
  • The estimated expenses assume you incur reasonable travel costs and expenses (e.g. transportation, hotel, meals) for two persons for 3 days of training.

9.  Initial Inventory:  $200,000 to $550,000

  • You will purchase your entire initial inventory and ongoing inventory from Pandora. The amount of inventory will depend in part on the size of your Store.
  • In very limited circumstances, Pandora may extend credit terms. Payment for all subsequent inventory purchases is due upon order.

10.  Computer System, Network Infrastructure, and POS:  $32,500 to $38,000

  • This estimate is for IT infrastructure, computer system, point-of-sale system, and all related software.

11.  Pre/Grand Opening Marketing:  $10,000 to $25,000

  • The pre/grand opening marketing expense is for your required advertising and marketing needed to promote the opening of your Pandora Store. You must incur these amounts between one month before you open the Store for business to one month after that date.
  • In addition to public relations costs and direct mail costs, it will include brochures, business cards, and miscellaneous items.

12.  Professional Fees:  $2,000 to $6,000

  • This amount is an estimate for attorneys and accounting fees in connection with your purchase of the franchise and related matters.

13.  Lease Payments – 3 Months:  $15,000 to $60,000

  • Your Pandora Store will need to have 600 to 1,100 square feet of retail space and rent typically varies by market.

14.  Insurance Premiums:  $4,000 to $7,000

  • You must purchase your insurance through Pandora’s designated insurance carrier, Jeweler’s Mutual Insurance Co., unless Pandora otherwise approves in writing.
  • Insurance premium estimates are for comprehensive liability insurance for your Store and related business operations only.
  • You will also need to obtain Worker’s Compensation insurance in such amounts as required by statutory limits in the state where your Store is located, Jeweler’s Block insurance, and any other insurance required by law or by your lease.

15.  Additional Funds – 3 Months:  $25,000 to $50,000

  • This amount of working capital is estimated to be sufficient to cover initial operating expenses not covered by initial sales during the first three months of operation and includes wages and miscellaneous expenses.

16.  Total:  $461,500 to $1,175,000

  • These amounts are estimates based on Pandora’s estimate of costs and market conditions prevailing as of the date of the Franchise Disclosure Document and the company’s experience in opening Pandora Stores in the United States over the past six years.

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