Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs 2013: Detailed Estimates of U-Swirl Frozen Yogurt Franchise Costs (2013 FDD)

by Franchise Chatter on October 4, 2013

in Franchise Costs, Frozen Yogurt Franchises

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Detailed Estimates of U-Swirl Frozen Yogurt Franchise Costs Based on Item 7 (Estimated Initial Investment) of U-Swirl’s 2013 Franchise Disclosure Document

  • “USI” means U-Swirl International, Inc., the franchisor. USI does business under the names U-Swirl International, Inc., U-Swirl Frozen Yogurt, U-Swirl-n-Go, Yogurtini, and Aspen Leaf.

U-Swirl Photo by U-Swirl of Arizona1.  Initial Franchise Fee:  $25,000 for a Single Unit Franchise OR $25,000 plus $5,000 times one less than the Minimum Number for an Area Development Agreement

  • The initial franchise fee for a Unit Franchise and the initial fee for an Area Development Agreement are non-refundable. The fees for supplies purchased from USI are non-refundable.

2.  Real Estate:  not specified

  • The franchisor expects that your USI Store will be located upon leased real property. The rental rate and other terms of specific leases will vary, depending upon negotiations with the individual landlord and on land costs. The monthly rental rate on a triple net lease varies greatly, depending upon negotiations with the landlord. These leases will often require an initial rental deposit to the landlord varying upon negotiations directly between you and the landlord.
  • The square footage for a USI Store may range from approximately 400 sq. ft. to 2,400 sq. ft. The minimum size for a typical USI Store is 400 sq. ft., but stores in malls, kiosks, or other unique locations may be smaller.
  • Because your real estate expense depends so much upon your individual negotiations with the landlord and other local factors, USI does not estimate rental or land costs.

3.  Site Development:  $10,000 to $15,000

  • This range is the franchisor’s estimate of your expenses for acquisition of working plans, permits, and licenses.

4.  Equipment:  $150,000 to $170,000

  • All equipment used in your USI Store must be in conformance with USI’s specifications.

5.  Leasehold Improvements:  $120,000 to $150,000

  • All construction or remodeling of the USI Store and all related improvements must be in accordance with USI’s standards, specifications, and prototype designs.
  • As of the date of issuance of the Disclosure Document, USI has two prototype plans. These prototype plans are not working plans and they require modification by your architect to meet your individual needs and to meet local building code requirements.
  • This range is the franchisor’s estimate of your expenses for the build out and tenant finish of your USI Store premises based on you receiving a “vanilla” shell from the landlord.
  • Your actual expenses will likely be lower if the premises already has improvements that are consistent with the USI standards and specifications. Your actual expenses will, however, depend to a considerable degree on the size of your premises.

6.  Travel and Living Expenses While Training:  $1,000 to $5,000

  • Your expenses vary based on whether you have one or two persons attend the initial training program. The low amount is based on one person attending training. The high amount is based on two people attending training.

7.  Signs:  $9,000 to $15,000

8.  Miscellaneous Expenses:  $25,000 to $45,000

  • The estimated amount shown includes an initial supply of point of purchase materials, uniforms, security deposits, utility deposits, a sales tax deposit, business entity filing fees (if applicable), legal and accounting fees incurred in establishing your business, and any insurance premium deposits.

9.  Opening Inventory:  $5,000 to $10,000

  • The amount shown is an estimate of your costs for the initial inventory specified by the franchisor in the Operations Manual.

10.  Grand Opening:  $5,000

  • You must spend at least $5,000 on advertising and promotions prior to, and in connection with, the grand opening of your USI Store, according to guidelines provided to you by USI. This amount is in addition to the Local Advertising Allocation.

11.  Additional Funds – 3 Months:  $10,000 to $26,000

  • The high amount includes an estimate of the Advertising Fund Fee payable during the first three months of operation of the store, which currently is paid by franchisees that own Yogurtini stores but not by franchisees that own U-Swirl Stores. The low amount does not include any Advertising Fund Fee payments.
  • The amount shown is an estimate of your pre-operational expenses that are not listed above, as well as estimated additional funds necessary for the first 3 months of your USI Store’s operations. It includes your required start-up capital. It includes  payroll costs for your employees, but it does not include any draw or salary for you; and it includes amounts incurred prior to opening and during the first three months of operation of your USI Store for sales or use taxes, other taxes, utilities, rent, equipment lease payments, royalties, advertising fees, and local advertising.
  • These figures are only estimates, and you may incur higher or lower expenses in starting the business.

12.  Totals:  $360,000 to $466,000 for a Single Unit Franchise; $360,000 to $466,000 plus $5,000 times one less than the Minimum Number for an Area Development Agreement

  • USI relied on its principals’ over 50 years of accumulative experience in the food service industry to compile these estimates.

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