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Franchise Costs 2013: Detailed Estimates of Floyd’s 99 Barbershop Franchise Costs (2013 FDD)

by Franchise Chatter on October 29, 2013

in Franchise Costs, Salon Franchise

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Detailed Estimates of Floyd’s 99 Barbershop Franchise Costs Based on Item 7 (Estimated Initial Investment) of Floyd’s 99’s 2013 Franchise Disclosure Document

1.  Initial Franchise Fee:  $35,000

  • When you sign a Development Agreement to open three or more Barbershops, you must pay an initial franchise fee of $35,000 for the first Floyd’s 99 Shop plus a development fee equal to $10,000 multiplied by the number of additional Barbershops to be developed, in a geographic territory reserved for your development of Barbershops.
  • The franchisor offers discounted initial franchise fees if you purchase the rights to develop more than five Barbershops.
  • The franchisor applies the non-refundable development fee paid toward the initial franchise fee for the second and each additional Barbershop to be developed, the balance of which is paid at a later date.

2.  Building and Tenant Improvements:  $80,000 to $200,000

  • Floyd's 99 Barbershop Photo by Never PhotoTypically, a Floyd’s 99 Shop will have approximately 1,200 to 1,800 square feet of retail space and will accommodate approximately 10 to 15 barber chairs. The lower estimate in the chart assumes that a tenant finish allowance is negotiated; the high-range estimate assumes no tenant finish allowance.
  • The estimates in the above chart reflect the build-out of average empty space based on the recommended Barbershop size, although your actual costs may be less or more than the estimates.
  • The leasehold improvements that you will typically make to a built but unimproved location include:  interior remodeling, floor covering, painting, HVAC, electrical, plumbing, design, and other improvements.
  • These estimated costs also include payments for architectural charges.
  • If you purchase property or a building, or both, for the Barbershop, your additional costs will depend on the location and size of the land and building. The franchisor does not typically invest in the land and building for a Floyd’s 99 Shop. It is unable to estimate these costs due to the significant variances based on location and market conditions.

3.  Equipment, Furnishings, and Electronics:  $30,000 to $50,000

  • This includes custom barber chairs, comfortable wait area seating, Internet stand, flat screen televisions, computer hardware, reception desk, and certain other furnishings and equipment.

4.  Signs:  $15,000 to $40,000

5.  Point-of-Sale System, Software, and Office Equipment:  $7,000 to $15,000

  • This item includes the estimated costs to purchase and license one computerized point-of-sale (POS) system and customized software, telephone system, photocopier/scanner/facsimile, reception area and back-office computers, and accounting software.

6.  Opening Inventory and Supplies:  $8,000 to $14,000

  • You must open with and maintain an adequate inventory of barber and stylist operating supplies, cleaning supplies, office materials, and an opening inventory of retail hair care products and related goods, some of which you may be required to purchase from the franchisor or its affiliates.

7.  Security Deposits, Utility Deposits, Business Licenses:  $5,000 to $12,000

  • Security deposits, if applicable to your Barbershop, range from one to two months’ rent; utility deposits range from a nominal amount to approximately $1,000; and business licenses range from approximately $100 to $3,000.
  • Stylists and barbers are responsible for obtaining and maintaining their own individual licenses; however, states typically require that the Barbershop have a separate license.

8.  Initial Advertising and Marketing Campaign:  $15,000

  • The franchisor reserves the right to require you to spend this amount for the first Floyd’s 99 Shop that is opened in a market where no other Floyd’s 99 Shops have been developed.
  • If you sign a Development Agreement to open more than one Barbershop in the same market, the franchisor reserves the right to require you to pay $10,000 for an opening advertising and marketing campaign for the second Barbershop and each subsequent Barbershop that you develop.

9.  Initial Training (Travel and Living Expenses):  $3,000 to $5,000

  • The estimate in the chart covers expenses for two people attending the orientation and initial training session, including classroom training and on-the-job training. If scheduling permits, the on-the-job training includes attendance at the opening of a new Barbershop in Colorado or other locations that the franchisor designates.
  • Estimates in the chart do not include tuition or expenses related to the company’s MIT program for Barbershop Managers.

10.  Additional Funds – 3 Months:  $40,000 to $70,000

  • This estimates your pre-operational expenses that the franchisor has not listed above, as well as additional funds necessary for the first three months of your business operations. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.

11.  Total Estimated Initial Investment:  $238,000 to $456,000

  • The franchisor relied on its principals’ 12 years of experience developing Floyd’s 99 Barbershops when preparing these figures. The franchisor does not offer financing either directly or indirectly for any part of the initial investment.

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