Franchise Costs 2013: Detailed Estimates of Doc Popcorn Mobile Poperating Unit Franchise Costs (2013 FDD)

Detailed Estimates of Doc Popcorn Mobile Poperating Unit Franchise Costs Based on Item 7 (Estimated Initial Investment) of Doc Popcorn’s 2013 Franchise Disclosure Document – Part 1

Mobile Poperating Unit

1.  Initial Franchise Fee:  $37,500 to $69,500

• You must choose which type of franchise that you wish to operate at the time you sign your franchise agreement:

• Single Unit Franchise:  1 Doc Popcorn Business
• Standard Franchise:  3 Doc Popcorn Businesses
• Empire Builder Franchise:  5 Doc Popcorn Businesses

• The Initial Franchise Fee is $37,500 for a Single Unit Franchise. If you purchase a Standard Franchise, you will pay an Initial Franchise Fee of $49,500. If you purchase an Empire Builder Franchise, you will pay an Initial Franchise Fee of $69,500.

• Initial Franchise Fees are paid only once based on the type of franchise acquired by you. If you purchase a Standard Franchise or Empire Builder Franchise, the only additional initial cost that you will incur over a Single Unit Franchise will be the increase in Initial Franchise Fee until you open the additional Doc Popcorn Businesses.

• Once you open additional Doc Popcorn Businesses, you will incur the costs listed in this Item 7 at the time you open the additional Doc Popcorn Businesses.

2.  PopCart and Accessories:  $22,500 to $55,275

• You must purchase your PopCart from DP International. Shipping costs for the PopCart are included in the estimate and vary depending on the type of unit and delivery destination and are estimated to range from $0 to approximately $5,000.

• The low estimate represents the cost of a PopCart with $0 shipping and the high estimate represents the PopCart, $5,000 in shipping and additional storage, display or warmer units for the PopCart.

3.  PopCart Transport Trailer:  $500 to $10,000

• You will also need a trailer which will be used to transport the PopCart to the events. The low end assumes that you will rent a trailer for the first three (3) months of operation and the high end assumes that you are purchasing a trailer.

4.  Vehicle:  $0 to $12,000

• You will need a suitable vehicle to tow the PopCart. You may use a vehicle that you currently own to pull the PopCart provided that the vehicle is in good condition, with no major dents or scratches or body damage, has the appropriate Doc Popcorn branding, and the franchisor approves it prior to use.

• Further, the franchisor reserves the right to revoke a vehicle approval should the vehicle no longer meet minimum standards, as determined solely by it.

• The low estimate assumes that you are using a vehicle that you currently own and the high estimate provides up to three (3) months of lease payments on either a thirty-six (36) month or a forty-eight (48) month lease for one vehicle.

5.  Opening Inventory:  $1,000 to $5,000

• You are required to purchase a designated minimum number of cases of Doc Popcorn flavorings and bags for selling popcorn. You must buy this amount of opening inventory from the franchisor’s Affiliate or a supplier designated by it.

• The franchisor may, at its sole discretion, permit you to buy lesser initial amounts of opening inventory depending, in part, on your proximity to a distribution center of its suppliers.

• You will also need to buy other required opening inventory, such as office supplies, popcorn, sugar, and oil from third party suppliers which are included in this estimate.

6.  Computer Equipment:  $2,000 to $6,000

• This figure includes the cost for a point-of-sale system, credit card processing, and back office computer systems for use with your PopCart. You may use a computer that you already own.

7.  Initial Training Expenses:  $1,000 to $3,550

• You are responsible for all travel and lodging expenses that you incur during your initial training. This amount varies depending on how far you are from the company’s training center in Boulder, Colorado.

• The franchisor has assumed 2 people will attend training.

8.  Mobile Assistance Fee:  $3,500 to $5,000

• This fee is payable to DP International. The high end represents the fee you will pay if you operate a Mobile Poperating Unit at a fixed location.

9.  Real Estate Lease:  $0 to $12,500

• If you choose to operate your Mobile Poperating Unit at a fixed location, you will be required to lease real estate or pay a percent of your Gross Revenue to the venue. You may incur lease or concession license charges, which may range between 10% and 50% of Gross Revenue.

• The low estimate assumes that you will not operate your Mobile Poperating Unit from a fixed location. The high estimate includes 1 month’s security plus 3 months’ rent for your initial period of operation, or 3 months of concession fees.

• Landlords typically require security deposits equal to 1 or 2 months’ rent and may, in addition, require payment in advance of the first and/or last (or more) month’s rent.

10.  Miscellaneous Opening Costs:  $1,500 to $5,000

• The estimate includes utility costs, permitting/plan check fees, business entity organization expenses, insurance, and deposits for the first three months of operation of your Doc Popcorn Business, as well as miscellaneous small wares, uniforms, and other items.

11.  Additional Funds – 3 Months:  $2,500

• This estimates your initial start-up expenses, other than the items identified separately above, during the initial phase of your business, which covers a 3-month period.

12.  Total PopCart Investment Estimate:  $72,000 to $186,325

• This total estimated initial investment is for costs and expenses uniform to all Mobile Poperating Units regardless of the type of Doc Popcorn Business.